Ujjivan Small Finance Bank’s net profit rose 145% year-on-year (YoY) in January-March on the back of strong growth in its loan book.
The small financier posted a bottomline of Rs 310 crore in the quarter under review, up 6% on a sequential basis.
The lender’s loan book grew 33% YoY to Rs 24,085 crore as on March 31 due a growth in micro group loans and individual loans. Micro group loans grew 36% YoY and individual loans grew 67%.
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Micro group loans and individual loans comprise 72% of the gross loan book. Loans to micro, small and medium-sized enterprises (MSMEs), housing loans and loans to financial institutions comprise the remaining 28% of the gross loan book.
The bank disbursed loans worth Rs 6,001 crore in the March quarter.
Deposits rose 40% YoY to Rs 25,538 crore as on March 31, aided by a growth in current account savings account (CASA) deposits and term deposits.
Retail term deposits rose 69% YoY and CASA deposits rose 35%. CASA deposits comprised 26.4% of overall deposits as on March 31.
Going ahead, the lender expects its loan book to grow at a compound annual growth rate of over 25% and its deposits to grow at over 30% in 2023-24 (April-March).
The lender’s cost of funds rose in the quarter under review and this weighed on its net interest margin.
Cost of funds rose to 6.9% in the March quarter from 6.1% a year ago. At the same time, net interest margin fell to 9.1% in the quarter under review from 10% a year ago.
Nevertheless, net interest income rose 36% YoY to Rs 738 crore in the quarter under review. Return on assets rose 162 basis points YoY to 3.9% in the March quarter.
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Gross non-performing asset (NPA) ratio fell to 2.6% as on March 31 from 7.1% a year ago. Net NPA ratio fell to 0.04% as on March 31 from 0.6% a year ago.
“We picked up our branch expansion during the quarter with 31 new branches and will continue it in the new fiscal with around 100 branches,” Ittira Davis, managing director and CEO, Ujjivan SFB, said.
“In FY24, we would be building on the base of FY23. The contribution of secured products in growth would see improvement as our strategy for respective verticals take clearer shape. Overall, we remain confident of the business growth and profitability.”