Ujjivan SFB Q1 FY25 results: Net profit declines 7% to Rs 301 crore

Ujjivan Small Finance Bank ( Ujjivan SFB) on Thursday recorded a 7 per cent year-on-year (YoY) drop in net profit to Rs 301 crore in the April-June quarter of FY25 from Rs 324 crore in the year-ago period due to higher provisions.

Sequentially, the net profit was down 9 per cent from Rs 330 crore in Q4 FY24.

Provisions for the quarter increased 322 per cent to Rs 110 crore in Q1 FY25 from Rs 26 crore in the corresponding previous quarter.

The net interest income (NII) of Ujjivan SFB rose 19 per cent YoY to Rs 941 crore, whereas the net interest margin (NIM) rose to 9.3 per cent from 9.2 per cent in the year-ago period.

The gross loan book of the Bengaluru-based SFB stood at Rs 30,069 crore as of June 2024, 19 per cent higher than Rs 25,326 crore as of June 2023. The share of the secured segment in the overall loan book increased to 31.3 per cent from 27 per cent as of June 2023. Sequentially, it was up from 30.2 per cent as of March 2024.

“…we are on track to meet our stated objective and will ensure to improve the secured book contribution to 40 per cent of the total gross advances by the end of the next financial year. New business segments like micro-mortgages, gold loans, and vehicle finance will play a meaningful role, offering an enhanced product suite to our customers and will see a significant spurt in business volumes, offsetting the impact on yields due to the rising secured book proportion,” said Sanjeev Nautiyal, MD & CEO, Ujjivan Small Finance Bank.

The deposits grew by 22 per cent YoY to Rs 32,514 crore. The low-cost current account savings account (CASA) deposits rose 27 per cent YoY to Rs 8,334 crore from the year-ago period.

The CASA ratio of the SFB stood at 25.6 per cent as of June 2024 compared to 26.5 per cent as of March 2024.

Its gross non-performing assets (GNPA) declined to 2.3 per cent in June 2024 from 2.1 per cent in March 2024. Net NPAs slipped to 0.4 per cent in the quarter under review from 0.3 per cent in March 2024.

AU SFB to apply for universal bank licence by Aug-end 

AU Small Finance Bank Managing Director Sanjay Agarwal on Thursday said the lender will apply for universal bank licence to the RBI next month. “The board has decided to go for a universal licence and approved the constitution of a committee headed by chairman H R Khan,” Agarwal told PTI. The committee will oversee the application process, he said. 
 

The bank has appointed a couple of consultants to help in filing applications, he said.

"We should be able to file in the next four weeks, may be by the end of August," he added.

The RBI in April invited applications from small finance banks meeting specified criteria, including a minimum net worth of Rs 1,000 crore, for becoming regular or universal banks.

The RBI, in November 2014, issued the guidelines for licensing of small finance banks (SFBs) in the private sector.

As per the April guidelines of the RBI, an SFB aiming to become a universal bank should have a minimum net worth of Rs 1,000 crore at the end of the previous quarter (audited) and the shares of the bank should have been listed on a recognised stock exchange.

It should also have a net profit in the last two financial years and Gross NPA and Net NPA of less than or equal to 3 per cent and 1 per cent, respectively, in the last two financial years.