Ujjivan Small Finance Bank Q2 profit up marginally at Rs 96 crore

Ujjivan Small Finance Bank (SFB) on Saturday reported a marginal rise in net profit at Rs 96 crore for September quarter as provisions spiked.

The bank posted a net profit of Rs 93 crore in the same quarter a year ago. In June quarter, the profit was Rs 55 crore.

Total income during July-September 2020-21 increased to Rs 818.01 crore from Rs 729.36 crore in the year-ago period on the back of healthy interest income, the bank said in a regulatory filing.

Core income or the interest income increased 15.2 per cent to Rs 753.61 crore from Rs 654.33 crore in the same quarter of 2019-20.

Net interest income grew 21 percent to Rs 470 crore.

However, income from other sources fell to Rs 64.40 crore from Rs 75.03 crore.

Net interest margin–a key gauge of profitability–went down at 10.2 percent during the quarter against 10.8 percent a year ago.

On the other hand, the lender improved on the cost to income ratio significantly at 56.6 percent from 69.5 percent.

On asset front, the bank witnessed a rise in gross non-performing assets (NPAs) at 0.98 percent of gross advances as on September 30, 2020 from 0.85 percent by the same period a year ago.

In value terms, gross NPAs stood high at Rs 136.09 crore as compared to Rs 109.40 crore.

However, net NPAs or bad loans improved at 0.14 percent (Rs 19.08 crore) as against 0.33 percent (Rs 42.53 crore).

The bank has not recognised any NPAs since August 31, 2020, in line with the interim order of the Supreme Court.

If the said order was not given effect to, pro-forma gross and net NPAs would have been 1.2 percent and 0.3 percent, respectively, it added.

Provisions for bad loans and contingencies were hiked by over 4-times to Rs 100.52 crore for September 2020 quarter from Rs 24.79 crore parked aside for the year-ago period.

Ujjivan SFB said it has made a total provision of Rs 70 crore for COVID-19 as on March 31, 2020 out of which Rs 45.86 crore was in respect of accounts in default but standard against the potential impact of the pandemic.

"Further, the bank has made additional provision of Rs 129 crore and Rs 100 crore during the quarter ended June 2020 and September 2020 respectively against the potential impact of COVID-19 on standard assets based on the information available at this point in time,” it said.

The provision held by the bank is in excess of the RBI prescribed norms, it added.

Among others, the lender witnessed 8 percent growth on the year in its gross advances at Rs 13,890 crore by the end of September.