Utkarsh SFB Q1 PAT climbs 28% YoY to Rs 137 cr

Utkarsh Small Finance bank's standalone net profit jumped 27.81% to Rs 137.39 crore in Q1 FY25 as against Rs 107.49 crore recorded in Q1 FY24.

Total income stood at Rs 1,070.56 crore in Q1 FY25, registering a growth of 31.78% from Rs 812.39 crore reported in the corresponding quarter previous year.

Profit before tax surged 28.83% year on year (YoY) to Rs 186.24 crore in the quarter ended 30 June 2024.

In Q1 FY25, Net interest income stood at Rs 573 crore, up 36% as against Rs 422 crore posted in Q1 FY24. Net interest margin (NIM) improved to 9.4% in the June quarter as compared to 9.2% recorded in Q1 FY24.

Deposits grew by 30% YoY to Rs 18,163 crore in Q1 FY25 led by growth in retail term deposits. The Bank continues to focus on building granular liabilities franchise. Banks retail term deposits grew by 47.7% YoY to Rs 8,729 crore.

On asset quality front, the bank's gross non-performing assets (GNPA) stood at 475.62 crore as on 30 June 2024 as against Rs 431.12 crore as on 30 June 2023, registering growth of 10.32% YoY.

The banks Net Non-Performing Assets (NNPA) stood at Rs 42.83 crore as on 30 June 2024 as against Rs 43.99 crore as on 30 June 2023, declined by 2.63% YoY.

Gross NPA ratio declined to 2.78% in Q1 FY25 as against 3.13% in Q1 FY24. Net NPA ratio reduced to 0.26% in Q1 FY25 as compared to 0.33% registered in Q1 FY24.

During the quarter, the banks loan portfolio grew by 30.6% YoY to Rs 18,798 crore. Additionally, the proportion of secured loans within the overall portfolio increased to 35% from 34% as of 31 March 2024.

The banks operating profit (pre-provisions) of Rs 311 crore in Q1 FY25, registering growth of 40.72% from Rs 221 crore in Q1 FY24.

The Banks CD ratio improved to 92.7% as on 30 June 2024 as against 96.7% as on 30 June 2023.

During the quarter, CRAR stood at 23.18% and Tier 1 capital at 20.39%.

The banks pre-provision operating profit (PpoP) increased by 40.7% YoY to Rs 311 crore in Q1 FY25 as against to Rs 221 crore reported in Q1 FY24.

Return on assets and return on equity stood at 2.3% & 18.1% respectively for Q1 FY25. The cost-income ratio was 54.1% during Q1 FY25

As of 30 June 2024, the provision coverage ratio, including floating provisions, was 91%. In addition to provisions made in accordance with RBI IRAC norms, the bank has consistently created floating provisions. These floating provisions amounted to Rs 169 crore as of 30 June 2024, compared to Rs 106 crore as of 30 June 2023.

Govind Singh, MD and CEO, Utkarsh Small Finance Bank said, Our business is growing at healthy pace with gross loan portfolio growth of 31% YoY and deposits growth of 30% YoY as on June 30, 2024. We continue to work towards improving the granularity of deposits profile and diversification of loan portfolio. Our deposit growth was led by retail term deposits, and in loan book we are increasing share of secured loans consistently. We are expanding our franchise, and opened 28 new branches during Q1, FY25, and have a total branch network of 916 branches, spread across 26 states & UTs of the country, as on June 30, 2024.

Utkarsh Small Finance Bank is engaged in providing banking and financial services with a focus on providing financial services to the underserved and unserved sections. The bank's microfinance lending activities are primarily focused in rural and semi-urban locations of the country while its other services are spread across the country.

The scrip slipped 2.76% to Rs 48.70 on the BSE.

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