Shares of this small finance bank recorded an intra-day low of Rs 32.10, around 7% down from its previous close of Rs 34.56 per share due to underwhelming Q3FY25 results.
Reason for the fall
The Ujjivan Small Finance Bank’s Net profit was down by 64%, from Rs 300 Crores in Q3FY24 to Rs 109 Crores in Q3FY25. Their NII (Net Interest Income) was up by 3%, from Rs 860 Crores to Rs 887 Crores over the same period.
Their Gross Non-Performing Assets (GNPA) stood at 2.68% in Q3FY25 as against 2.18% in Q3FY24, and Net Non-Performing Assets (NNPA) was at 0.56% as against 0.17% over the same period.
The bank’s Gross Loan Book was up by 10% YoY, from Rs 27,743 Crores in Q3FY24 to Rs 30,466 Crores in Q3FY25. Their total deposits of the bank rose by 16% YoY, from Rs 29,669 Crores in Q3FY24 to Rs 34,494 Crores in Q3FY25.
CASA was at Rs 8,662 crore up by 15% YoY with a CASA ratio at 25.1% as of Q3FY25. The savings account deposits grew by 14%, from Rs 6,885 Crores in Q3FY24 to Rs 7,834 Crores in Q3FY25. Similarly, the current account deposits grew by 23%, from Rs 672 Crores in Q3FY24 to Rs 829 Crores in Q3FY25.
Deposit Mix as of Q3FY25
The majority of the deposits come from customers in metropolitan areas with 42% of the total deposits, while 38% from urban customers, 17% from customers in semi-urban areas, and 3% from rural areas. Their customers mainly comprise individuals who contribute 58% of the deposits, while banks contribute 19% and corporate customers contribute 13%.
Key Highlights
The bank’s Secured loan book is at 39% of the total book as of Q3FY25, and the secured book grew by 52% YoY. The bank saw healthy growth in secured book with major contributors being -Affordable Housing with 45% and MSME with 21% growth in secured book. Group and Individual Loan business has started showing green shoots and volumes are expected to pick up from Q4FY25.
Management Commentary
Mr. Sanjeev Nautiyal, MD & CEO of Ujjivan Small Finance Bank, stated that Q3FY25 had been a strong quarter, with consistent improvement in the diversification of the loan book. The strategy of focusing on more secured loans showed accelerated results, contributing 39% to the total asset loan, which grew 13% QoQ and 52% YoY. This contributed to a loan book growth of ₹30,466 crore, up 0.4% QoQ and 10% YoY.
He further mentioned that the bank sold ₹270 crore worth of stressed loan assets to manage asset quality and made an accelerated provision of ₹30 crore to safeguard against future challenges. Additionally, the bank is implementing structural changes in its liability strategy to better target affluent customer segments, including Non-Residents, Corporate Salary holders, and Traders.
Share Price Movement
Ujjivan Small Finance Bank with a market capitalization of Rs 6,492.40 Crores, was trading around Rs 33.40 per share, down by 3.4% from its previous close of Rs 34.56 apiece.
About Ujjivan Small Finance Bank
Ujjivan Small Finance Bank Limited is a small finance bank incorporated in 1949 to carry on the business of a small finance bank in India. The bank serves over 93 lakh customers through 753 branches, 611 ATMs, and 24,293 employees spread across 326 districts and 26 states and union territories in India.
Written by Adhvaitha Nayani
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