Earnings Review
Suryoday Small Finance Bank PAT down 41.8% on fall in asset quality
This story was originally published at 22:45 IST on 23 January 2025
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--Suryoday Small Fin Bk provision coverage ratio 44.7% as on Dec 31
--Suryoday Small Fin Bk Oct-Dec NIM 8.4% vs 9.7% quarter ago
--Suryoday Small Fin Bk CASA ratio 19.5% as on Dec 31
--Suryoday Small Fin Bk Oct-Dec NII at INR 2.68 bln, up 9.2% YoY
--Suryoday Small Fin Bk deposits INR 97.08 bln as on Dec 31, up 49.7% on yr
--Suryoday Small Fin Bk advances INR 95.63 bln as on Dec 31, up 25.8% on yr
--Suryoday Small Fin Bk Apr-Dec total income INR 16.40 bln vs INR 12.99 bln
--Suryoday Small Fin Bk Apr-Dec PAT INR 1.49 bln vs INR 1.55 bln year ago
--Suryoday Small Fin Bk capital adequacy ratio 26.92% as on Dec 31
--Suryoday Small Fin Bk Oct-Dec provisions INR 336.2 mln vs INR 378.6 mln
--Suryoday Small Fin Bk net NPA ratio 3.13% as on Dec 31 vs 0.80% qtr ago
--Suryoday Small Fin Bk gross NPA ratio 5.53% as on Dec 31 vs 3.03% qtr ago
--Suryoday Small Fin Bk Oct-Dec total income INR 5.27 bln vs INR 4.63 bln
--Suryoday Small Fin Bk Oct-Dec PAT INR 333.0 mln vs INR 572.2 mln yr ago
--Suryoday Small Fin Bk Oct-Dec net profit INR 333.0 mln vs 572.2 mln yr ago
By Srijita Bose
MUMBAI – Suryoday Small Finance Bank's net profit fell 41.8% on year to INR 333.0 million in Oct-Dec owing to higher expenses and lower asset quality. For the period of Apr-Dec, the bank's net profit was down nearly 4.1% on year to INR 1.49 billion.
In the reporting quarter, the small finance bank's other operating expenses zoomed 45.7% on year to INR 1.31 billion, adding to the total expenses of the bank excluding provisions and contingencies at INR 4.56 billion, up nearly 30.9% on year. The interest expenses rose 33.1% on year to INR 2.20 billion in the reporting quarter.
The gross non-performing asset ratio for the quarter was 5.53% as on Dec. 31, up from 3.03% a quarter ago and 3.06% a year ago. The net non-performing asset ratio was 3.13%, up from 0.80% at the end of September and 1.42% a year ago. The bank also reported INR 2.70 billion of fresh slippages during the quarter with rollback and recoveries of INR 143 million.
The bank's provisions and contingencies were, however, down 49.7% on quarter and nearly 11.2% down on year to INR 336.20 million. The bank had a floating provision of INR 583.4 million as on Dec. 31, the same as reported at the end of September. This is used to calculate the net NPA and provision coverage ratio. Excluding technical write-offs, the bank's provision coverage ratio stood at 44.7% as on Dec. 31.
The bank also covered nearly 95% of its unsecured portfolio under the credit guarantee fund for micro units scheme. The lender's capital adequacy ratio as on Dec. 31 was 26.9%, with Tier-I capital of 25.3% and Tier-II capital of 1.6%.
"The bank as part of prudent risk management strategy, started covering the eligible unsecured loans under the CGFMU scheme (credit guarantee fund for micro units scheme), since FY23, thereby making these loans quasi-secured. This coverage was initiated considering the cyclicality that the sector faces," Baskar Babu Ramachandran, managing director and chief operating officer, said in a press statement.
The total income of the bank during the reporting quarter was, however, up 14.01% to INR 5.27 billion. For Apr-Dec, the total income was up nearly 26.3% to INR 16.40 billion. In Oct-Dec, Suryoday Small Finance Bank's net interest income rose 9.2% to INR 2.68 billion. The net interest margin for the quarter was 8.4%, down from 9.7% a quarter ago and 9.8% a year ago.
The bank's gross advance rose 25.8% to INR 95.63 billion. Meanwhile, deposits increased 49.7% yearly to INR 97.08 billion. "The deposit growth has outpaced the growth in assets with the digital deposit mobilisation contributing to the growth," Ramachandran said in the statement. The CASA ratio stood at 19.5% as on Dec. 31.
On Thursday, shares of the small finance bank closed 1.7% higher at INR 135.04 on the National Stock Exchange. End
Edited by Deepshikha Bhardwaj
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