Mumbai: Utkarsh Small Finance Bank reported a narrower net loss of ₹70 crore for the second quarter of FY27, compared with a loss of ₹348 crore in the corresponding quarter last year, reflecting an improvement in its financial performance. The bank also reported growth in deposits and advances alongside a sharp reduction in non-performing assets during the July-September quarter.
Loss Narrows
Utkarsh Small Finance Bank's pre-provision operating profit (PPOP) recovered to ₹85 crore in Q2 FY27, against a pre-provision operating loss of ₹3 crore in Q2 FY26. The turnaround in operating profitability marked an improvement in the lender's quarterly performance. For the first half ended September 30, 2026, the bank reported a net loss of ₹104 crore. Its pre-provision operating profit for the six-month period stood at ₹149 crore.
Deposit Growth
Total deposits increased 6.6 per cent year-on-year to ₹23,869 crore as of September 30, 2026. The expansion in deposits reflected growth in the bank's funding base during the reporting period. Deposit mobilisation remains an important component of the lender's business operations.
Loan Portfolio
The bank's gross loan portfolio expanded 7.5 per cent year-on-year to ₹20,062 crore. The share of secured lending increased to 52 per cent of the overall portfolio, compared with 47 per cent a year earlier. This shift indicates a higher proportion of collateral-backed lending within the bank's credit portfolio.
Asset Quality
Utkarsh Small Finance Bank reported a significant improvement in asset quality. Its gross non-performing asset (NPA) ratio declined to 5.9 per cent from 12.2 per cent on September 30, 2025. The net NPA ratio improved to 2.7 per cent, compared with 4.9 per cent in the corresponding period last year.
Capital Position
The bank's capital adequacy ratio stood at 17.0 per cent at the end of September 2026. The latest results highlight narrowing losses, stronger operating profitability and improving asset quality. However, the lender remained loss-making during both the September quarter and the first half of FY27.
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