On Wednesday, Ujjvan Small Finance Bank ltd announced its financial performance for the half-year and quarter ended on 30th September, 2022. The bank recorded another milestone quarter with record profitability. Looking at its performance for Q2 of the financial year 2022-23, it recorded gross advances at ₹20,938 crore up 44% Y-o-Y and 8% Q-o-Q, strong disbursements for Q2– ₹4,866 crore up 56% Y-o-Y.
As of 30th September, 2022, the total provision on books were at ₹1,126 crore – ₹115 crore standard provision, ₹762 crore account level NPA provision and ₹250 crore floating provision. Entire Floating provision of ₹250 crore created in June, 2021 continues to be there on books and can be utilized for making specific provisions in extraordinary circumstances with prior approval of RBI; only ₹160 crore is utilized for NNPA/ PCR calculation, ₹30 crore towards Tier II capital and the balance ₹60 crore has been grouped as part of other provisions without utilizing the same towards Tier II capital, this amount continues to be earmarked for utilization for NNPA/PCR as and when needed.
Along with this, the continued traction on collections side at 100% in September 2022, Portfolio at risk continues to decline; 6.1% as of Sep’22* vs 7.9% as on Jun’22 GNPA/ NNPA declined to 4.4% / 0.04% as of Sep’22 against 5.9% / 0.1%respectively as of June 2022; total of ₹157 crore written-off in Q2FY23; Provision coverage ratio as on Sep’22 is 99% Substantial reduction in restructured book; constitutes 2.3% of gross advances with provision cover of 63%, Deposits at ₹20,396 crore as of Sep’22 up by 45% Y-o-Y; Retail deposits at 61% of total deposits against 52% as of Sep’21; CASA ratio at 26.9% in Sep’22 vs 22.5% in Sep’21. Retail banking CASA grew 79% Y-o-Y contributing 79% to total CASA; healthy retail liability customer acquisition.
Net Interest Income of ₹663 crore in Q2FY23; Net interest margin at 9.8% in Q2FY23 against 8.1% in Q2FY22. Operating expenses to average assets at 6.6%; Cost to Income ratio at 52.5% in Q2FY23 vs 82.3% in Q2FY22, PPoP at ₹385 crore vs ₹79 crore in Q2FY22; PAT of ₹294 crore vs ₹ (274) crore Y-o-Y v capital adequacy ratio at 26.70% with Tier-1 capital at 23.37%; Liquidity coverage ratio at 219% as of September 2022.
Ittira Davis, MD & CEO, Ujjivan Small Finance Bank said, “Q2FY23 is another milestone quarter with record profitability. While disbursements continue to sustain the Rs 4,000+ crore mark, deposit growth took-off well this quarter driven by retail deposits. Our loan book grew 8% vs Jun’22 / 44% vs Sep’21 to ₹ 20,938 crore and deposits are up 11% vs Jun’22 / 45% vs Sep’21. Retail deposits and CASA contribute to 61% and 26.9% of total deposit. PAR continues to improve, currently at 6.1% vs. 7.9% as on June 2022”.
“This is largely due to sustained collection efficiency at pre-covid levels and normalised slippages; while recoveries continue to be strong. We continue to hold strong provisioning buffers on our books with PCR at 99%, resulting into NNPA of mere 0.04%. Additional provision of ₹30 crore is being used towards CRAR and ₹60 crore has been grouped as part of other provisions without utilising the same. We remain focused on building granular deposit franchise and continuously enhance digital capabilities to drive improved business and productivity levels. With recent capital raise and sustained high profitability, Sep’22 CRAR is far more than comfortable to capitalise on opportunities ahead”, he added.
