Piggy bank
Piggy bank

On Wednesday, shares of Ujjivan Small Finance Bank (SFB) plunged 8.1 percent to hit an intra-day low of Rs 28 apiece on the BSE, a day after the company reported Q4 results in which the asset quality worsened in the March quarter.

At 12.22 PM, the share price was 3.11 percent down at Rs 29.60 apiece. On Tuesday, the bank's shares closed at Rs 30.60 apiece, up 1.49 percent on BSE.

The bank's bad loans rose to 7.1 percent of the total book from below 1 percent in the previous quarter.

On Tuesday, the lender reported an 86 percent jump in its net profit to Rs 136 crore for the last quarter of the fiscal ended in March 2021.

The bank had posted a net profit of Rs 73 crore in the same quarter of the preceding fiscal year 2019-20.

Total income during Q4FY21 was down by 9 percent at Rs 735 crore as against Rs 810 crore in the year-ago quarter. Net interest income also fell by 21 percent to Rs 368 crore as against Rs 467 crore in the year-ago period.

"The quarter was exceptionally good. Our disbursal was at an all-time high and it was more than two times of what we had disbursed in March 2020. We reported Rs 136 crore of profit which is the highest-ever for us in a single quarter," the bank's managing director and CEO Nitin Chugh said, PTI reported.

Disbursement in the fourth quarter grew by 31 percent to Rs 4,274 crore as against Rs 3,254 crore during the same quarter of last year.

Non-micro-banking's contribution was 28 percent of the total portfolio as against 23 per cent in March 2020. Secured advances stood at 27 percent of the total portfolio as at March 2021 as against 22 per cent in the same period last year, the bank said in a release.

Net interest margin declined to 7.9 percent from 11.2 percent in the corresponding quarter of FY2020.

Chugh said the bank's net interest margin was impacted on account of de-recognition of interest income on the gross NPAs.

"This impacted yields as well as cost-to-income ratio...We continue to carry Rs 172 crore of COVID provisions which provides for credit cost in upcoming months," he explained.

Chugh said collection efficiency had improved to 94 percent in March 2021 but dropped to 88 percent in April. "Considering that there are lockdowns all across the country, the collection efficiency has got impacted in May," he added.

Gross non-performing assets (NPA) deteriorated to 7.1 percent from 1 percent. Net NPA stood at 2.9 percent from 0.2 percent last year. Total provisions as of March 31, 2021, stood at Rs 955 crore, covering 6.3 percent of gross advances. Provision coverage ratio as of March 2021 was 60 per cent.

Provisions and contingencies in the reported quarter were reduced by 81 percent to Rs 22 crore as against Rs 117 crore parked aside in the year-ago quarter.

Ujjivan SFB said it added 3.15 lakh customers during the quarter, reflecting strong new retail customer acquisition.

For the full year 2020-21, net profit fell by 98 percent to Rs 8 crore from Rs 350 crore in FY20. Income during the year, however, increased by 3 percent to Rs 3,117 crore from Rs 3,026 crore. Net interest income also grew by 6 percent to Rs 1,729 crore in FY21 from Rs 1,634 crore in FY20.

The provisions and contingencies for the entire fiscal shot up by 179 percent to Rs 801 crore from Rs 287 crore in FY20. Its deposits grew by 22 percent to Rs 13,136 crore as of March 2021 from Rs 10,780 crore as of March 2020.

Capital adequacy ratio stood at 26.4 percent with tier-1 capital at 25 percent.

(With PTI inputs)

(To receive our E-paper on whatsapp daily, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)

Free Press Journal