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Informist, Tuesday, Jul. 14, 2026

--CARE Ratings downgrades Utkarsh Small Fin Bank's tier-2 bonds to A- from A 

MUMBAI – Utkarsh Small Finance Bank Ltd. Tuesday said CareEdge Ratings has downgraded the rating assigned to its tier-II bonds aggregating to INR 2 billion to "A-" from "A" and revised the outlook to "stable" from "negative". The downgrade factors in the weakening of the bank's profitability profile and asset quality stress based on financial performance as on Mar. 31, the bank said.

Utkarsh Small Finance Bank had reported a net loss of INR 11.51 billion for the financial year 2025-26 (Apr-Mar), against a net profit of INR 240 million for FY25, owing to higher credit costs, a sharp decline in net interest margin, and relatively high operational-cost base, CareEdge Ratings said.

The stable outlook reflects the agency's expectation that the bank's credit profile will remain supported by its adequate capital position, boosted by equity infusion of INR 9.5 billion, improving asset quality trend on a sequential basis, and continuing portfolio diversification, CareEdge Ratings said. "...the outlook indicates that the bank's financial profile is likely to stabilise over the medium term, supported by a gradual recovery in earnings and continued improvement in risk metrics," CareEdge Ratings said.  End

Reported by Nandini Sinha

Edited by Rajeev Pai

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