Ujjivan Small Finance Bank reports 7% decline in Q1 net profit; stock trades lower

Ujjivan Small Finance Bank saw its pre-provisioning operating profit grow by 11% YoY to ₹510 crore. The bank also reported a 19% YoY growth in its gross loan book to ₹30,069 crore while total deposits expanded by 22% YoY to ₹32,514 crore.

The bank saw its asset quality remain healthy at the end of Q1FY25 as the gross non-performing asset (GNPA) reduced by 3 basis points (bps) to 2.3% while the net non-performing assets (NNPA) was higher by 33 bps to 0.4%. The current and savings account (CASA) ratio for the quarter came in at 25.6%. CASA grew 27% YoY to ₹8,334 crore.

In FY25, the bank is aiming to see its gross loan book grow by up to 20% with deposit growth being in line with asset growth. The bank is expecting a net interest margin of 9% and a Return on Equity (RoE) of up to 20%.

Sanjeev Nautiyal, managing director and chief executive officer of Ujjivan Small Finance Bank said that the bank saw a growth in its secured asset book led by affordable housing. He added that the bank will be able to achieve asset book growth and healthy business volumes post-H1FY25. The bank had also seen signs of stress in isolated pockets which led the bank to be more cautious.

“During the last 2 quarters, signs of stress were visible in some isolated pockets of a few states where we operate. Basis which we had developed a cautious approach especially towards acquiring new-to-credit customers and suitably moderated our disbursements” He said.

Shares of the company have declined by nearly 23% since the beginning of the year. The stock has lost over 0.3% in the past year.