Airtel Payments Bank set to break even this fiscal

Airtel Payments Bank (APB) is set to break even in this financial year, having notched up strong revenue growth in the previous fiscal and also turned contribution positive, implying revenue fully covered variable costs, said a senior company executive.Covid-19 is a major growth driver for Bharti Airtel’s payments banking arm, he said, as customers want banking solutions closer to their homes and also seek convenient and more secure digital payment options.“Airtel Payments Bank is confident of breaking even this year, helped by the growing scale of its model that leverages deep distribution backed by investments in digital infrastructure,” the executive told ET on condition of anonymity. 83131835In 2020-21, APB saw 60% year-on-year growth in savings accounts deposits and its base of active revenue earning customers (RECs) swelled more than 77% year-on-year to 55 million. The company recorded 32% year-on-year revenue growth to ₹627 crore, and its services were a key reason for reducing mobile subscriber churn for parent Bharti Airtel, said company insiders. Airtel’s monthly customer churn dipped to 2.2% in the quarter to March from 2.6% a year ago.“APB has taken another giant leap towards profitability this year,” managing director Anubrata Biswas said, adding that the combination of its brand and innovative products backed by distribution reach and technology positions it well to accelerate growth further.He said Airtel’s innovations such as ‘Safe Pay’ are a major services differentiator amid Covid-19 and that APB has also become a large provider of cash collection services to institutions and companies and sees it as a big growth engine. Bharti Airtel CEO Gopal Vittal had recently warned the telecom operator’s 321 million mobile users about increasing cases of cyber fraud and urged them to use Airtel Safe Pay, which can be activated while using APB services. In December 2020, Bharti Enterprises chairman Sunil Mittal had said Bharti Airtel may upgrade its payments bank licence to that of a small finance bank at some point to enter the lending business and attract larger deposits.

from Economic Times https://ift.tt/34AInhW