Ujjivan SFB reports net loss of Rs 279 cr in Q3 on higher provisioning

Ujjivan Small Finance Bank on Wednesday reported a net loss of Rs 279 crore in the third quarter ended December 2020, mainly due to higher provisioning.

The bank had posted a net profit of Rs 90 crore in the October-December quarter of 2019-20.

Ujjivan SFB said there was a loss of Rs 279 crore in Q3 FY21 on account of accelerated credit provisioning.

The total income of the bank grew by a marginal 1 per cent to Rs 789 crore in Q3 FY21 as against Rs 782 crore in the same period of 2019-20, Ujjivan Small Finance Bank said in a regulatory filing.

Its net interest income was up at Rs 432 crore as against Rs 427 crore.

However, treasury income more than doubled to Rs 93 crore during the quarter from Rs 39 crore.

The bank said its gross non-performing assets (NPA) stood at 1 per cent and net NPA at 0.05 per cent by December-end 2020 compared to 0.9 per cent and 0.4 per cent, respectively, a year ago.

"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 NPA would have been 4.8 per cent and 2.05 per cent, respectively," the bank said.

Provisions for bad loans and contingencies grew multi-fold to Rs 583 crore for the quarter, as against Rs 31 crore reserved for the year-ago period.

Net interest margin-- a measure of the difference between the interest income generated and amount of interest paid out -- fell to 9.7 per cent from 10.9 per cent in the year-ago quarter.

Among others, disbursement for Q3 FY21 stood at Rs 2,184 crore, down from Rs 3,403 crore in Q3 FY20.

"We believe the trend would continue into Q4 and the coming fiscal. Collections in non-delinquent accounts are also moving close to pre-COVID levels; as of Jan'21 around 95 per cent of customers are paying EMIs (as against 91 per cent as of Oct'20) which is a healthy sign," Ujjivan Small Finance Bank MD and CEO Nitin Chugh said.

The bank has restructured Rs 852 crore (8.5 per cent of the book as by end of third quarter) of the portfolio in micro banking basis extensive discussion with borrowers, analysis of repayment behaviour and current cash-flows, he added.

"We are seeing its positive impact on collection in Jan'21 and expect the trend to improve going forward. We are monitoring the situation in stressed pockets and have taken the accelerated provision of Rs 547 crore this quarter. The total provision in books stands at Rs 1,029 crore, covering 8 per cent of gross advances," Chugh said.

The lender said it has strengthened its processes, technology platforms and focused on improving productivity across business verticals, which is now significantly above pre-COVID levels, evident from higher business volumes despite lower head-count.

Shares of Ujjivan SFB closed at Rs 37 apiece on BSE, up 0.82 per cent from the previous close.