Ujjivan Small Finance Bank has demonstrated strong financial performance in Q1 FY26, reporting significant growth in both its loan book and deposit base. The bank's latest figures reveal a positive trajectory in its core business areas.

Deposit Growth

Ujjivan Small Finance Bank has witnessed a substantial increase in its deposit base. The bank's total deposits have grown by 18.80% year-on-year to ₹38,612.00 crore. This growth in deposits indicates increasing customer trust and the bank's ability to attract and retain depositors.

Loan Book Expansion

The bank has achieved a notable 10.70% year-on-year increase in its gross loan book, which now stands at ₹33,287.00 crore. This expansion reflects the bank's continued focus on growing its lending activities and catering to the financial needs of its target customer segments.

Sector-wise Performance

Ujjivan Small Finance Bank has shown particularly strong growth in specific loan segments:

• Affordable housing loans rose by an impressive 53.10% year-on-year
• MSME loans increased by 59.30% compared to the previous year

These figures highlight the bank's success in targeting key growth areas within its loan portfolio.

Disbursements and Asset Quality

Overall disbursements for Q1 FY26 grew by 23.80% year-on-year, reaching ₹6,543.00 crore. This indicates a robust demand for the bank's loan products.

However, the Gross Non-Performing Assets (GNPA) ratio stood at 2.50%, showing an increase from the previous quarter. This suggests a slight deterioration in asset quality that may require monitoring.

CASA Ratio

The Current Account Savings Account (CASA) ratio declined to 24.30%. While still representing a significant portion of the bank's deposits, this decrease may indicate a shift in the composition of the bank's deposit base.

Market Implications

The reported growth in Ujjivan Small Finance Bank's key financial metrics, particularly in deposits and targeted loan segments, may be viewed positively by investors and market analysts. It demonstrates the bank's ability to expand its business in a competitive banking landscape, particularly within the small finance bank segment.

As Ujjivan Small Finance Bank continues to show strong performance in its core operations, it reinforces its position in the banking sector and its commitment to serving its target market segments. However, the slight increase in GNPA and decrease in CASA ratio suggest areas for potential improvement in the coming quarters.

Ujjivan Small Finance Bank has released its fourth quarter financial results for the fiscal year 2025, revealing a mixed performance with improvements in asset quality but a decline in profitability.

Financial Performance

Profitability

Ujjivan Small Finance Bank reported a net profit of ₹83.40 crore for Q4 FY2025, meeting market estimates but marking a significant year-over-year decline of 74.70% from the same quarter of the previous year.

Net Interest Income

The bank's Net Interest Income (NII) stood at ₹864.40 crore, down 7.40% compared to the same quarter last year.

Asset Quality

Improved Gross NPAs

The bank reported a significant improvement in its Gross Non-Performing Assets (GNPA) ratio, which decreased to 2.18%. This reduction suggests enhanced asset quality management and potentially improved recovery efforts.

Net NPAs

The Net Non-Performing Assets (NNPA) ratio improved to 0.49%, indicating effective management of non-performing assets.

Business Growth

Deposit Growth

Total deposits grew by 20.00% year-over-year, reaching ₹37,630.00 crore. This growth demonstrates the bank's ability to attract and retain customer deposits.

Loan Book Expansion

The gross loan book reached ₹32,122.00 crore, marking an 8.00% annual growth. This moderate expansion indicates the bank's continued focus on lending activities.

Secured Loan Portfolio

The bank's secured loan portfolio increased to 44.00% of total loans, suggesting a strategic shift towards more secured lending practices.

Strategic Developments

Universal Banking License Application

Ujjivan Small Finance Bank has applied for a universal banking license, indicating its ambition to expand its range of banking services and potentially target a broader customer base.

Conclusion

Ujjivan Small Finance Bank's Q4 FY2025 results present a mixed picture:

• Net profit met estimates but showed a significant year-over-year decline
• Improved asset quality with reduced GNPA and NNPA
• Substantial growth in deposits
• Moderate expansion of the loan book
• Strategic shift towards secured lending
• Application for universal banking license

While the bank faces challenges in maintaining profitability, the improvements in asset quality and business growth provide positive signals. The application for a universal banking license suggests a forward-looking approach to expanding its market presence. Investors and stakeholders will likely be watching closely to see how the bank leverages these developments to drive future growth and address profitability concerns in the coming quarters.