Ujjivan Fin Q1 net rises to Rs 45 cr; total income grows

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Mumbai | Published: August 7, 2018 3:08:18 AM

Ujjivan Financial Services, the holding company of Ujjivan Small Finance Bank (SFB), on Monday reported a consolidated net profit of Rs 45 crore for the quarter ended June, as against a net loss of Rs 75 crore in the year-ago period.

The company’s total income rose 29% year-on-year (y-o-y) to Rs 462 crore, as net interest income (NII) grew 61% to Rs 222 crore.

Ujjivan Financial Services, the holding company of Ujjivan Small Finance Bank (SFB), on Monday reported a consolidated net profit of Rs 45 crore for the quarter ended June, as against a net loss of Rs 75 crore in the year-ago period.

The company’s total income rose 29% year-on-year (y-o-y) to Rs 462 crore, as net interest income (NII) grew 61% to Rs 222 crore. The net interest margin (NIM) stood at 11.6% in Q1FY19, unchanged sequentially.

Ittira Davis, managing director and chief executive officer, Ujjivan Financial Services, said the bank would be able to hold on to a margin of around 11% as its cost of funds has been falling. “Our cost of funds is now at 8.6%, down from 9% in the same quarter last year,” he said, attributing the drop in cost to refinancing in the microfinance portfolio.

The gross non-performing asset (NPA) ratio improved 90 basis points (bps) to 2.7% from 3.6% a quarter ago, and the net NPA ratio fell 40 bps to 0.3% from 0.7% at the end of March.

The company’s gross loan book stood at Rs 7,787 crore, up 20.5% over Q1FY18, with disbursements of Rs 2,092 crore during the quarter, up 23% from the year-ago period. Non-microfinance loans now account for over 9% of Ujjivan SFB’s portfolio, with micro and small enterprise (MSE) loans and affordable housing loans each accounting for 4-5% of the overall loan book, Davis said. The bank is planning to launch personal loans, two-wheeler loans and loans to financial institutions in the quarters ahead. Davis said the bank is targeting a 20% growth in its loan book in FY19.

The deposit base grew to Rs 3,803 crore, up 841% from Rs 404 crore at the end of Q1FY18. The share of retail deposits improved to 19.7% from 11.3% at the end of March. The current account savings account (CASA) ratio improved to 6.3% from 3.7% over the same period.

The bank will continue to hold interest rates on deposits at current levels, at least for the time being Davis said. “We are pretty competitively placed and unless there are some major changes by the Reserve Bank of India (RBI), we shall maintain rates at these levels,” he noted.

The bank’s capital adequacy ratio stood at 23.8%.

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