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Informist, Thursday, Jul 25, 2024

--Ujjivan Small Fin Bk: Floating provision 2.5 bln rupees as on Jun 30 
--Ujjivan Small Fin Bk Apr-Jun provisions 1.1 bln rupee vs 261.1 mln 
--Ujjivan Small Fin Bk Basel II capital adequacy ratio 24.85% Jun 30 
--Ujjivan Small Fin Bk Apr-Jun total income 17.7 bln rupee vs 14.6 bln 
--Ujjivan Small Fin Bk net NPA ratio 0.41% Jun 30 vs 0.28% qtr ago 
--Ujjivan Small Fin Bk gross NPA ratio 2.52% Jun 30 vs 2.23% qtr ago 
--Ujjivan Small Fin Bk Apr-Jun net profit 3.01 bln rupees vs 3.24 bln 
--Ujjivan Small Finance Bank Apr-Jun net profit 3.01 bln rupees 

By Priyasmita Dutta

NEW DELHI – A rise in provisioning and higher slippages ate into Ujjivan Small Finance Bank's net profit for the June quarter. The small finance bank reported a net profit of 3.01 bln rupees, down 7.1% from a year ago. Analysts had projected the Bengaluru-headquartered bank to post a profit of 2.40-3.12 bln rupees in Apr-Jun, compared with 3.24 bln rupees a year ago. Sequentially, the net profit was down 8.7%.

The small finance bank's provisioning, which adversely impacted net profit, was 1.10 bln rupees, over four-fold from 261.1 mln rupees a year ago. Sequentially, provisioning rose 39.1%. Brokerages had projected microfinance portfolios seeing higher slippages during the quarter due to election-related collection disruption in May.

Ujjivan Small Finance Bank's net non-performing assets worsened to 1.11 bln rupees, rising nearly nine times from a year ago. Sequentially, the net non-performing assets rose 45.8%. The small finance bank's net NPA ratio at the end of June was 0.41%, weaker than 0.28% a quarter ago. The gross NPA ratio worsened to 2.52% from 2.23% a quarter ago. 

Heatwave conditions during the summer also tend to take a toll on small finance bank's slippages, brokerages said. At 1447 IST, shares of the small finance bank traded 1.3% lower at 43.93 rupees on the National Stock Exchange. 

The bank said it has a 2.5-bln-rupee floating provision as of June end. The floating provision created in June 2021 continues to be on books, and can be utilised for making specific provisions in extraordinary circumstances with prior approval of the Reserve Bank of India, the small finance bank said in its investor presentation.

As of Jun 30, the small finance bank's Basel II capital adequacy ratio was 24.85%.

The net profit for the quarter was lower than the previous quarter as normalisation in credit costs continued, Managing Director and Chief Executive Officer Sanjeev Nautiyal said. 

The small finance bank's interest expenditure weighed down on the bottomline in the quarter ended June. The interest expense was 6.36 bln rupees in Apr-Jun, up 28.6% from a year ago. Sequentially, it was up 6.9%.

The net interest income of the small finance bank was 9.41 bln rupees, up 19% on year. Sequentially, it was up 1%. During the June quarter, the total income of the small finance bank was 17.74 bln rupees, up 21.2% on year and 0.6% quarter on quarter. 

The net interest margin of the bank was marginally down at 9.3% in Apr-Jun from 9.4% a quarter ago but higher than 9.2% a year ago. The small finance bank had a one-time boost in net interest margin in the March quarter.

The small finance bank has projected its interest margin in 2024-25 (Apr-Mar) at 9%, the investor presentation said.

On the business side, Ujjivan Small Finance Bank's gross loan book grew 19% on year to 300.69 bln rupees as of Jun 30. Disbursements during Apr-Jun fell 21% from a quarter ago to 52.86 bln rupees. The loan book is expected to grow 20% in 2024-25, the small finance bank said as its guidance for the year.    End

Edited by Saji George Titus

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