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Ujjivan Financial Services Ltd.

BSE: 539874 Sector: Financials
NSE: UJJIVAN ISIN Code: INE334L01012
BSE 00:00 | 22 Jun 388.40 14.60
(3.91%)
OPEN

374.00

HIGH

392.50

LOW

369.90

NSE 00:00 | 22 Jun 388.50 14.35
(3.84%)
OPEN

376.00

HIGH

392.35

LOW

369.55

OPEN 374.00
PREVIOUS CLOSE 373.80
VOLUME 168335
52-Week high 432.05
52-Week low 285.00
P/E 12946.67
Mkt Cap.(Rs cr) 4,698
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 374.00
CLOSE 373.80
VOLUME 168335
52-Week high 432.05
52-Week low 285.00
P/E 12946.67
Mkt Cap.(Rs cr) 4,698
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Ujjivan Financial Services Ltd. (UJJIVAN) - Chairman Speech

Company chairman speech

Dear Shareholders

Financial Year 2017-18 has been the first full year of operations of our wholly ownedBank (SFB). Transformational journey to a Small Finance Bank threw up multifacetedchallenges. The Bank had to convert the existing NBFC outlets numbering over 450 intofull-fledged bank branches under a phased programme and deploy modernized ITinfrastructure. Traditional brick and mortar branches apart access to alternative bankingchannels like ATMs phone and mobile technology aided services had to be provided tocustomers. New employees had to be inducted and were to be intensively trained to buildcompetencies in banking operations. Full-fledged Treasury and Risk and Compliance unitshad to be set up. MSE and Housing verticals had to be strengthened to provide the muchneeded business thrust. Deposit business had to be built from scratch and funding cost hadto be reduced. The Bank leadership team and the rank and file rose up to the manifoldchallenges admirably and had rolled out 187 branches with plan to take the number to 475by the end of the year. Deposit build up happened quickly with a base of over Rs 3000crore albeit wholesale and funding cost dropped by 140 bps from 10.4% to 9%. Micro andSmall Enterprises business and Housing saw a growth momentum at 7.2% of the overallportfolio by year

The adverse impact of demonetisation however lingered through most part of the lastfinancial year. We witnessed considerable damage to the credit discipline and repaymentbehaviour of borrowers. The defaults were pronounced in certain geographies. Defying ourexpectations a significant portion of the impaired assets turned hard core NPAs. Wemaintained a conservative stance and took a hit of Rs.177 crore by way of loan write offduring FY 2017-18 and contained total credit costs at Rs 311 crore constituting 4% of theportfolio. The Bank strengthened its recovery organization by setting up specialisedcollection team for recovery from hard core NPAs and concurrently revisited its growthstrategies in the affected markets. It is gratifying that the rank and file particularlyof the microfinance business through strong grit and determination put the business backon track; monthly repayment has since improved from 89.5% to 97.3%. The bank was able toclose the year in black. The net non-performing assets stood at 0.7% as of March 2018.

Mr Samit Ghosh Managing Director of the Bank has lucidly articulated in his letter toyou the challenges faced during the financial year and how they were met. He has alsodetailed the strategic initiatives taken and proposed to put the bank back on asustainable growth phase.

Moving forward the bank plans to leverage fully on the branch network and the robusttechnology infrastructure it has set up and build the growth momentum in all itsbusinesses segments. Selective build-up of Microfinance business in chosen geographieswhile maintaining steady growth overall non-linear growth in MSE and Housing verticalforay into rural banking introduction of new loan products opening up new business linessuch as personal lending two wheeler ramp up of deposit mobilisation with focus onretail are some of the key strategic financingand priorities planned. Ujjivan FinancialServices Limited the HOLCO at the consolidated level posted a total income of Rs.1582crores- an increase of 13.2% over the previous year and a net profit after tax of Rs 7.3crore. The Board has recommended a dividend of 5% subject to the approval ofshareholders.

Post formation and business transfer to Ujjivan Small Finance Bank your company hadapplied to the Reserve Bank of India for registering the Company "Ujjivan FinancialServices Limited" (HOLCO) as an NBFC-Core Investment Company. The RBI vide its letterdated October 10 2017 has approved the conversion of the Company into SystemicallyImportant Core Investment – Non-Deposit taking - Non-Banking Financial Companyi.e. from NBFC-ND-SI-MFI to NBFC-ND-SI-CIC - and has issued a new Certificate ofRegistration dated October 10 2017. In compliance with the RBI direction the Company hassurrendered the NBFC-ND-SI- MFI Certificate. As a holding Company we exercise oversighton the overall functioning of the SFB and provide it funding support when needed subjectto the regulatory framework. Before closing I regret to mention that Ms. Sudha Sureshthe Managing Director & CEO of the Company has resigned for personal reasons to takeeffect from 30th June 2018. She has been associated with the company for nearly a decadeand signific in successful listing of the Company on the stock exchanges her contributionto the company was and transitioning the company to a Bank. The Board accepted herresignation with regret and placed on record its appreciation of her valuablecontribution. The Board has proposed to appoint Mr Ittira Davis as the Managing Directorand CEO effective July 1 2018 subject to RBI approval. Mr. Ittira Davis is currently theChief Operating Officer of the Bank. He is a career banker with over 36 years of corporateand investment banking experience. He has previously worked with Citi Bank in India andthe Arab Bank Group in the Middle East and Europe. I seek earnestly your support to him.

We thank you for your excellent understanding and support and look forward to the samein greater measure in the years ahead.

With Best Wishes

K.R. Ramamoorthy