Utkarsh Small Finance Bank Limited — PPTs, 03-05-2025: Investor Presentation

1. Financial Highlights:

Utkarsh Small Finance Bank’s gross loan book rose 7.5% YoY to ₹19,666 Cr, driven by a 45% increase in non-JLG loans, offset by a 17% drop in JLG loans. Total deposits grew 23.4% YoY to ₹21,566 Cr, with retail term deposits up 33.5% and CASA up 31.2%, pushing CASA + retail term deposits ratio to 71.1%. Net interest income increased 7% to ₹2,023 Cr, while other income surged 50% to ₹600 Cr, helping operating income grow 15% to ₹2,623 Cr. Profit after tax fell sharply to ₹24 Cr from ₹498 Cr due to a 190% rise in provisions. Asset quality weakened with gross NPAs at 9.4% and net NPAs at 4.84%. Cost-to-income ratio improved to 51.2%, and capital adequacy remained healthy at 20.93%.

2. Strategic Initiatives & Growth Drivers:

Focus remains on diversifying assets with emphasis on retail loans in MSME, housing, and commercial vehicle segments, increasing secured loans to 43%. Expansion in top 100 deposit centers continues alongside digital initiatives like video KYC, robotic process automation, and mobile banking to enhance reach and customer experience. Data analytics supports improved underwriting and collections, while fee income is being expanded through cross-selling and third-party tie-ups. Branch network grew to 1,092, primarily in rural and semi-urban areas.

3. Business Developments:

The bank added 204 outlets over the year and enhanced its product mix, with micro-banking business loans up 36% YoY and MSME retail assets rising 17%. MSME, housing, and vehicle loan segments scaled well with growth potential within existing branches. Investments in digital collections and UPI payments were stepped up. No major acquisitions, but fintech partnerships support digital product and payment solution enhancements.

4. Market Position & Competitive Advantage:

Utkarsh holds a strong foothold in underpenetrated rural and semi-urban markets, serving over 4.99 million customers. Its differentiated branch network combined with focus on secured and high-yield loan segments offers advantage. A growing retail deposit base and wide presence across 27 states support a stable funding profile. Technology adoption and ESG efforts further strengthen scalability and service quality. Experienced leadership aligns well with growth ambitions.

5. Investor Implications:

The bank offers positive growth potential with healthy loan and deposit growth in higher-yield retail segments and CASA. Elevated asset quality stress and sharply higher provisions pose near-term profitability headwinds. Branch expansion and tech investments underpin long-term scalability, while diversification into fee income may improve revenue stability. Execution risks center on managing credit costs and sustaining collection efficiency amid portfolio diversification.