Ujjivan SFB’s Q4 PAT up over two-fold on strong NII growth, recoveries

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Ujjivan Small Finance Bank reports net profit of Rs. 310 crore for the fourth quarter, 2.4 times higher from Rs 127 crore in the same period last year. For FY23, profit after tax was Rs.1,100 crore.

The bank’s total loan book increased by 33 per cent YoY and 10 per cent QoQ at ₹24,085 crore on 31st March. The bank disbursed loans of Rs.20,037 crore during the year, of which Rs.6,001 crore was in the fourth quarter.

There has been an all-round growth, with Financial Institutions and Housing Group (FIG) crossing quarterly payments of ₹400 crore and ₹300 crore, respectively, the bank said in a statement.

Net Interest Income (NII) for the quarter was up 36 per cent at Rs. 738 crore while for FY23 it was 52 per cent higher at Rs. 2,698 crore. Net interest margin (NIM) was 9.1 percent for the quarter, and 9.5 percent for fiscal ’23, including IBPC and loan securitization.

The gross NPA rate improved to 2.6 percent from 3.4 percent in the prior quarter, and the net NPA rate to 0.04 percent from 0.05 percent. The bank wrote off loans worth ₹67 crore during the quarter.

Deposits amounted to ₹25,538 crore as of March 31, up 40 per cent year-on-year and 10 per cent quarter-on-quarter. Deposits of current and low-cost savings accounts accounted for 26.4 percent of total deposits, registering an annual growth of 11 percent.

Also read: South Indian Bank’s Q4 net profit increased by 23% to Rs.334 crore

“Our deposits continued to outpace asset growth of over Rs 25,000 crore. We had a slight credit cost for the year on the back of continued collection – lower slippages and strong recoveries. While slippages have returned to nature at the end of the year, the recovery processes may continue for a while.

It is expected that the cost of credit for fiscal year 24 will remain below 100 basis points, and that the contribution of secured products to growth will improve with the crystallization of the bank’s strategy and its implementation for the concerned sectors.

He said, “We remain confident in business growth (more than 25 percent of total loan book growth) and profitability (about 22 percent of return on equity). Deposits are expected to grow by more than 30 percent, led by growth of more than 35 percent. in checking and savings account deposits, and net net income remained above 9 percent in FY24.

Regarding the proposed merger with parent company Ujjivan Financial, the bank has submitted its application to Bengaluru NCLT and is awaiting feedback and communications, Davis said.