Ujjivan Small Finance Bank has reported a nearly three-fold jump in net profit to ₹317 crore for the first quarter of FY27, supported by strong growth in core interest income and a sharp decline in credit costs.
The Bengaluru-based lender reported a 25% year-on-year increase in interest income to ₹2,025 crore during the April-June quarter. Interest expenses rose at a slower pace of 10% to ₹839 crore, helping the bank post its highest-ever quarterly net interest income of ₹1,186 crore, up 39% year-on-year. Net interest margin expanded to 8.5% from 7.7% in the corresponding quarter last year.
Credit cost declined 43% year-on-year to ₹127 crore, boosting profitability. ‘Asset quality trends remain encouraging, with credit cost at 0.9% and absolute slippages lower than expected during the quarter,” said Carol Furtado, Executive Director, Ujjivan Small Finance Bank. She added that FY27 credit cost guidance has been revised to 0.9%–1.0% of Average Total Assets.
The bank’s gross loan book grew 29% year-on-year to ₹42,903 crore as of June-end. The secured loan portfolio rose 43% to ₹21,638 crore and accounted for 50.4% of the total gross loan book. The secured portfolio includes vehicle finance, MSME, housing and gold loans. Group loans, including microfinance and non-microfinance, continued to account for 35% of the overall portfolio. The bank has guided for 25% advances growth in FY27 and has revised its return on assets (RoA) guidance upwards to 1.8%-2.0%.
Total deposits increased 25% year-on-year to ₹48,129 crore. Low-cost CASA deposits grew 37.8% to ₹12,930 crore, taking the CASA ratio to 26.9%. The bank’s cost of funds declined by 71 basis points year-on-year to 6.9% during the quarter.
