Ujjivan Small Finance Bank to step up focus on secured loan portfolio

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Ujjivan Small Finance Bank (SFB) is planning to increase it secured loan portfolio to about 40 per cent over next three years, according to Ittira Davis, Managing Director and Chief Executive Officer.

At present the secured portfolio is at 30 per cent. “Over the next three years, we aim to have an unsecured portfolio at 60 per cent. We will step up focus on lending to affordable housing, secured Micro, Small and Medium Enterprises, vehicle and gold loans,’‘ Davis told businessline. 

The Bangalore-based SFB sees certain advantages of increasing secured portfolio to 40 per cent. ”This will give us more balanced portfolio and can also augur well for us when we move towards becoming a universal bank,’‘ the CEO said. 

Ujjivann SFB is looking at securing universal bank licence from Reserve Bank of India (RBI) over next three years.

Good performance

When asked on capital position, Davis said the bank has 25 per cent cash to risk-weighted assets ratio (CRAR) is ‘sufficiently well capitalised’ now. 

“The profit accretion for the last two years has also been good and we are not in the need of any capital now,” he added.

On the industry scenario, the CEO said the SFB tackled the Covid-19 situation aptly and came out of it without any issues. “In general, SFBs are doing good in terms of business as well as catering to the customer needs,’‘ he said. 

Ujjivan SFB is now in expansion mode. It recently entered Andhra Pradesh market with opening of its branch in Vijayawada.  This move marks the bank’s presence in 26 States and Union Territories, with 700 branches serving over 79 lakh customers nationwide. As a part of this expansion, the bank will also open branches in Rajahmundry and Visakhapatnam.

The bank is likely to close the current financial year with a total branch network of 725.