Finance

Ujjivan Small Finance Bank’s Q2 Earnings Surpass Expectations with 11% Profit Growth

In the second quarter, Ujjivan Small Finance Bank Ltd. exceeded analysts’ expectations as its standalone net profit surged by 11.4% year-on-year to reach Rs 327.74 crore for the quarter ending in September, according to official exchange filings. Analysts surveyed by Bloomberg had projected a standalone profit of Rs 307.46 crore for the July-September period.

The bank’s net interest income, or core income, saw substantial growth, rising by 24.1% year-on-year to reach Rs 823.34 crore. Additionally, other income showed a remarkable increase of 28.6% to Rs 188.64 crore over the year. However, the net interest margin for the quarter decreased by 40 basis points sequentially to 8.80%. The cost of funds remained elevated, increasing by a further 20 basis points to 7.4% on a sequential basis. Operating expenses rose by 24.4% year-on-year, totaling Rs 528.62 crore.

Total deposits for the bank witnessed a remarkable year-on-year increase of 43%, reaching Rs 29,139 crore, while the gross loan book expanded by 27% year-on-year to Rs 26,574 crore in the quarter ending in September. CASA deposits experienced a 28% year-on-year growth, totaling Rs 7,012 crore, with the CASA ratio standing at 24.1%.

The bank’s asset quality improved as the gross non-performing asset ratio decreased by 27 basis points to 2.35% quarter-on-quarter. However, the net NPA ratio rose slightly by 3 basis points sequentially, reaching 0.09%.

In this quarter, the bank reported provisions of Rs 46.92 crore, in contrast to a write-back of Rs 9.94 crore during the same period last year.

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