Ujjivan in the red with Rs 12 cr loss as bad loans spike

Ujjivan Financial Services today reported a net loss of Rs 11.95 crore in the quarter to September due to rise in the non-performing loans.
It had reported a net profit of Rs 73 crore in the year-ago period.
"We had taken a credit cost hit of Rs 88 crore in the quarter," Sudha Suresh, MD & CEO Ujjivan Financial Services. Net losses, however, were lesser than Rs 74.94 crore in the first quarter of the current fiscal.
"We have significantly reduced our losses in this quarter due to lower credit cost compared to the previous quarter and also because business volumes returned to normal levels. We expect credit cost to taper off to normal levels in the next two quarters," Ujjivan Small Finance Bank managing director and CEO Samit Ghosh said.

Ujjivan Financial Services is the holding company and promoter of its 100 per cent subsidiary Ujjivan Small Finance Bank, which started operations from February 2017.
Gross non-performing assets worsened to 4.99 per cent in the quarter from 0.17 per cent. Net NPAs rose to 1.38 per cent from 0.04 per cent.

"Demonetisation had disturbed the credit discipline and affected our recoveries. But now, we are seeing improvement in collection levels, and hence see NPA number better going ahead," Suresh said.
NIM stood at 10.55 per cent as against 13.02 per cent. Gross loan book stood at Rs 6,669.21 crore, an increase of 2.83 per cent. Disbursement was down 10.5 per cent to Rs 1,954.28 crore.

Cost of funds came down to 9.65 per cent from 10.41 per cent in FY17 as it raised low cost deposits post the attainment of scheduled bank status.
Suresh expects a further reduction of 120 basis points in its cost of funds in the next two quarters.
Its share ended flat at Rs 344.10 with a negative bias on the BSE, which also closed down 0.08 per cent.