Ujjivan Small Finance Bank Limited — Updates, 23-01-2025: Press Release

**Press Release Summary:**

Ujjivan Small Finance Bank reported robust growth in its financial performance for Q3 FY25. The gross loan book reached ₹30,466 crore, marking a 10% increase year-on-year, with a secured loan book constituting 39% of total loans. Key metrics include a gross non-performing asset (GNPA) ratio of 2.7% and a net non-performing asset (NNPA) ratio of 0.6%. Total deposits rose to ₹34,494 crore, reflecting a 16% increase from the previous year. The bank's net interest income (NII) was ₹887 crore, while the net interest margin (NIM) stood at 8.6%. The provisioning coverage ratio is cushioned at 80%, supported by a proactive accelerated provision of ₹30 crore, aimed to mitigate future risks. With a healthy CASA ratio of 25%, the bank expresses a positive outlook for growth and operational expansion.

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**Investor Presentation Summary:**

1. **Financial Highlights:** Ujjivan Small Finance Bank recorded a 10% increase in the gross loan book to ₹30,466 crore and achieved a net interest income (NII) of ₹887 crore, up 3% YoY. However, profit after tax (PAT) dropped 64% to ₹109 crore, with a return on equity (RoE) of 8.8%.

2. **Strategic Initiatives and Growth Drivers:** The bank focused on diversifying its asset mix, increasing its secured loan portfolio, and expanding its retail deposit base. A transition towards becoming a universal bank has been approved by the board, with an application planned for Q4 FY25.

3. **Business Developments:** Notable growth segments include affordable housing and microfinance, with robust collection efficiency nearing 96%. The bank has also engaged in selling stressed assets worth ₹270 crore to maintain asset quality.

4. **Market Position and Competitive Advantage:** Ujjivan maintains a stable market share of approximately 3.95% in group loans. Enhancements in technology, such as the digital customer interface and data analytics, are aimed at improving service delivery and expanding reach.

5. **Investor Implications:** Despite the drop in PAT, the bank's increasing secured loan book, improved asset quality metrics, and healthy liquidity position are indicators of potential growth and resilience in its operational strategy, suggesting that investors should watch closely for a recovery trajectory as market conditions normalize.