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Kolkata: Ujjivan Small Finance Bank has made a turnaround with Rs 127 crore net profit in the quarter ended March 31 after three consecutive quarterly losses as the bank could streamline its act of loan recovery and strengthen the top deck after a slew of an exodus.

The net profit was however lower than the year-ago quarter’s Rs 137 crore.

“The bank completed the turnaround we envisaged under our 100-day plans put to execution beginning September last year,” said managing director Ittira Davis, who took over the reins on January 14, filling the vacuum in leadership after the sudden exit of Nitin Chugh in August last year. “This was possible on the back of strong business performance coupled with persistent efforts on collections.”

The bank has re-build the leadership team arresting the exodus seen at the senior and mid-level, Davis said.

The net interest margin of the lender improved to 10.1% in the fourth quarter against 7.9% in the year-ago period. Net interest income for the quarter stood 48% higher at Rs 544 crore against Rs 368 crore. Operating profit rose 40% to Rs 217 crore against Rs 155 crore in the same period.

“We would like to keep NIM around 10%. We have not altered lending rates after the 40 basis point repo rate hike, but we may need to do it if Reserve Bank of India raises the policy rates again,” Davis said.

The bank said its loan disbursements during the quarter at Rs 4,870 crore were the highest ever and 14% more than it did in the year-ago period. Gross advances stood at Rs 18,162 crore, reflecting a 20% annual raise, while secured advances contributed 30% of the total portfolio against 27% a year back.

Its collections efficiency improved to 100% in March, helping portfolio at risk to fall to 9.6% at the end of the reporting period against 14.9% three months prior to that. Gross non-performing assets ratio fell to 7.1% from 9.8% seen at the end of December 2021. Provision coverage ratio rose to 92% of the bad loans.

The bank’s deposit mobilisation rose 39% year-on-year to Rs 18,292 crore with retail depositors contributing 54% of it. The share of low-cost current and savings accounts (CASA) in total deposits rose to 27% from 21% a year back, helping the profitability.

Its capital adequacy ratio stood at 19% at the end of the last fiscal.


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