Ujjivan Bank's Q3 net profit up 2.34% to ₹300 crore

How Ujjivan Bank beat the odds in Q3

Ujjivan Small Finance Bank reported a 2.34% increase in its net profit for the third quarter of FY 2023-24, despite the challenges posed by the Covid-19 pandemic. The bank's net profit stood at ₹300 crore, compared to ₹293 crore in the same period last year.

Ujjivan Bank's Q3 operating profit, CEO's statement

Ujjivan Small Finance Bank, Q3 operating profit rose by 17.5% to ₹45,730 crore. Ittira Davis, MD and CEO, said the bank's loan and deposit growth guidance remains intact.  He also said the credit cost will stay below 100 bps. The bank plans to expand its physical presence and complete its merger with its holding company by March 2024.

What drove  the bank performance?

The bank attributed its growth to a strong recovery in its microfinance and retail segments, which saw a 17% and 23% increase in their loan portfolios, respectively.  The bank also improved its asset quality, with its gross non-performing assets (NPAs) ratio declining to 0.85% from 0.97% in the previous quarter.

Ujjivan Bank's net interest income grows 11.5%

The bank's net interest income, which is the difference between interest earned and interest expended, grew by 11.5% to ₹783 crore in Q3, from ₹702 crore in Q3 last year.  The bank's net interest margin, which is the ratio of net interest income to average assets, improved to 10.8% from 10.4% in Q3 last year.

Why should you Invest in Ujjivan Bank?

Ujjivan Small Finance Bank is one of the leading players in the small finance bank space, with a customer base of over 5.8 million and a network of 575 branches across 24 states.  The bank has a strong track record of profitability, growth, and social impact. The bank's shares are currently trading at a discount to its peers, making it an attractive investment opportunity.

Ujjivan Bank's provisions increase 18.7%

The bank's provisions, which are the funds set aside for potential loan losses, increased by 18.7% to ₹97 crore in Q3, from ₹82 crore in Q3 last year. The bank said this was due to higher provisioning for standard assets and Covid-19 related contingencies.