Ujjivan Small Finance Bank net loss widens to Rs 274 crore on poor asset quality, higher provisions

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November 09, 2021 3:15 AM

Owing to deteriorating asset quality, Ujjivan SFB’s provisions rose to Rs 436.88 crore in the reporting quarter, lower than Rs 473.21 crore in the previous quarter.

According to a release issued by the bank, its disbursement increased to Rs 3,122 crore in the reporting quarter, higher by 114% on-year and 138% on a sequential basis.

Ujjivan Small Finance Bank (SFB) on Monday reported a net loss of Rs 274 crore for the quarter ended September 30, owing to poor asset quality and higher provisions. The lender had logged a net loss of Rs 233 crore in the previous quarter. It, however, had reported a net profit of Rs 96 crore a year ago.

During the quarter under review, Ujjivan SFB’s gross non-performing asset ratio (NPA) rose sharply to 11.80% from 9.79% as on July-end and 0.98% a year ago. Net non-performing assets rose to 3.29% as on September-end from 2.68% a quarter ago and 0.14% in the corresponding quarter of the previous year.

Owing to deteriorating asset quality, Ujjivan SFB’s provisions rose to Rs 436.88 crore in the reporting quarter, lower than Rs 473.21 crore in the previous quarter.

“We have done major restructuring and taken accelerated credit provisions during the quarter. We believe, subject to potential third wave of Covid, our GNPA has peaked out and will gradually reduce hereon,” said Martin PS, officer on special duty at Ujjivan Small Finance Bank.

In the reporting quarter, the lender has restructured total loans amounting to Rs 962 crore, taking the total quantum of restructured loans to Rs 1,480 crore. It has made Rs 504-crore provision against its restructured book as on September-end, as per its investor presentation.

According to a release issued by the bank, its disbursement increased to Rs 3,122 crore in the reporting quarter, higher by 114% on-year and 138% on a sequential basis. Its gross advances, as on September-end, stood at Rs 14,514 crore, up 5% on year.

“We continue to focus on diversification with non-micro banking book contributing 34% (as against 32% as of June’21) to the total asset portfolio. We have acquired 1.8 lakh new retail customers during the quarter; retail deposits proportion increased to 52% of the total deposits, as against 48% as of June’21,” said Martin P.S.

Net interest income—difference between interest earned and expended—increased 17% on a yearly basis to Rs 391 crore in the reporting quarter, while the net interest margin stood at 8.1%, lower than 10.2% a year ago.

Total deposits rose 31% on-year to Rs 14,090 crore as on September-end, when the capital adequacy ratio stood at 22.2%, lower than 31% a year ago.

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