Utkarsh Small Finance Bank Reports ₹168 Crore Q3 Loss

16 Feb 2025 , 07:56 AM

Utkarsh Small Finance Bank Ltd has reported a net loss of ₹168 crore for the quarter ended March, 2025, compared to a net profit of 116 crore in the same quarter last year, owing to high provisions and tough lending environment. Net Interest Income (NII) slightly reduced by 0.5% to ₹480 crore as against ₹482 crore in Q3 FY24 because of continued slower loan growth.

Gross Non-Performing Assets (GNPA) spiked to 6.17%, compared with 3.88% in the previous quarter, while Net NPA climbed to 2.5% from 0.89%, signalling asset quality pressures.

As of December 31, 2024, Gross loan portfolio expanded 16.2% yoy to ₹19,057 crore, share of secured loans increased to 41% versus 38% as of September 2024 and 34% as of March 2024.

Registrations grew 33.5% from the previous year, to ₹20,172 crore, as retail term deposit vaulted 40.6% to ₹10,163 crore. CD improvement to 91.9% from 99.2% in Dec-23 showing better liquidity management.

Provision coverage ratio (including floating provisions) was at 61% owing to higher provisioning on account of tightening credit norms. In the period of first nine months of FY25, Pre-Provision Operating Profit (PPoP) rose 8.1% YoY to ₹773 crore compared to ₹715 crore in 9M FY24. Profit after tax for 9M FY25 declined to ₹21 crore against ₹338 crore in 9M FY24 on higher provisioning and to regulatory influences on microfinance lending.

The capital adequacy ratio (CRAR) was strong at 21.10%, and Tier 1 capital stood at a healthy 17.94%, ensuring that the institution remains financially stable. The bank had a network of 1,028 branches spread over 26 states and union territories, which enhanced its market presence.

Govind Singh, MD & CEO, said the higher provisioning was necessitated as credit supply for micro banking borrowers was tightened, but will ensure long term benefits for the sector.