Ujjivan Small Finance Bank Ltd reports Q3FY21 earnings

Ujjivan Small Finance Bank Ltd. [BSE: 542904; NSE: UJJIVANSFB], today announced its financial performance for the nine month and quarter ended December 31, 2020.

Summary of Ujjivan Small Finance Bank Business Performance - Q3 FY 2020-21

- Gross advances at ₹13,638 crore

- Disbursement for Q3FY21 stood at ₹2,184 crore vs ₹3,403 crore at Q3FY20; Dec'20 disbursements up by 8% Y-o-Y (₹1,118 in Dec '20 vs. ₹ 1,038 in Dec '19)

- Retail other than Microbanking portfolio contribute 27% of total portfolio as against 22% in Dec'19

- Secured Advances stand at 25% of the total portfolio as on Dec'20 as against 21% in Dec'19

- Strong Treasury Income of ₹93 Cr in Q3FY21 against ₹39 Cr in Q3FY20

- Early recognition of expected credit costs of ₹547 Cr, to protect future ROI in the coming quarters

- GNPA at 1% and NNPA at 0.05% in Dec'20, as against 0.9% and 0.4%, respectively as of Dec'19. The Bank has not recognised any NPAs since August 31, 2020, in line with the interim order of Hon. Supreme Court. If the said Order was not given effect to, pro-forma GNPA & NNPA would have been 4.8% & 2.05% respectively.

- Deposits at ₹11,617 Cr. as of Dec'20 up by 9% Y-O-Y as against Dec'19; covering 85% of total advances

- Retail deposits at 48% of the total deposits vs. 43% of Dec'19| CASA ratio at 18% in Dec'20 vs. 12% in Dec'19

- Strong new retail customer acquisition; 1.7 Lakh customers acquired during the quarter

- Net Interest Income of ₹432 crore in Q3FY21; Net Interest Margin at 9.7% in Q3FY21, against 10.9% in Q3FY20

- Cost to Income ratio at 62% in Q3FY21 vs. 71% in Q3FY20

- Loss of ₹279 crore in Q3FY21, on account of accelerated credit provisioning

- ROA/ ROE at (5.8%) %/ (34.7%) % in Q3FY21 vs. 2.1%/ 14.0% in Q3FY20

- Capital adequacy ratio at 27% with Tier-1 capital at 26%|Liquidity coverage ratio at 179% as of Dec'20

- Gold Loan pilot in progress - Tie ups with leading Fin-Techs to supplement business growth.

- Disbursed 1,650 cases worth ₹ 55 Crore under MSE Navnirman Loan (NNL) backed by ECLGS scheme

- 165+ outlets Money Mitra agents (Ujjivan Transaction point) across 16 states facilitating basic banking services

Mr. Nitin Chugh, MD & CEO, Ujjivan Small Finance Bank said, "Business is moving towards normalcy with disbursements showing Y-o-Y growth; we believe the trend would continue into Q4 and the coming fiscal. Collections in non-delinquent accounts are also moving close to pre-COVID levels; as of Jan'21 around 95% of customers are paying EMIs (as against 91% as of Oct'20) which is a healthy sign. We have restructured ₹852 crore (8.5% of the book as of Dec'20) of portfolio in MicroBanking basis extensive discussion with borrowers, analysis of repayment behaviour and current cash-flows. We are seeing its positive impact on collection in Jan'21 and expect the trend to improve going forward. We are monitoring the situation in stressed pockets and have taken accelerated provision of ₹547 Cr. this quarter; total provision in books stands at ₹1029 crore (covering 8% of gross advances). In line with our liability strategy of building strong granular and stable deposit base, retail deposits are up 20% Y-o-Y; CASA stands at 18% vs 12% (Dec'19); cost of funds further reduced to 7.1% from 8.1% in Dec'19/ 7.4% in Sep'20. Customer acquisition (acquired 7.3 lakh deposit accounts in 9MFY21) and value added products remain our key focus. We have setup a solid base - on both asset and liability side - and are well prepared to scale up and grow further from here on. Additionally we have strengthened our processes, technology platforms and focused on improving productivity across business verticals - now significantly above pre-COVID levels which is evident from higher business volumes despite lower head-count. We continue to expand our reach through strategic tie-ups (fintechs, payment banks etc.) which supplements sourcing and help provide better service to our customers. Our commitment and conviction towards becoming a new age digital mass market bank remains strong as we continue to serve the unserved and underserved segment."

Source : Equity Bulls

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