Kolkata: Ujjivan Small Finance Bank has expanded the share of the secured portfolio to more than half of the total loan book for the first time, as part of a strategic shift to reduce reliance on unsecured microfinance business.
The bank’s secured loan portfolio increased about 43% year-on-year to Rs 21,638 crore at the end of the June quarter, accounting for 50.4% of the gross loan book. At the end of March, the share of secured loans was 49.4%.
Its gross loan book expanded 29% year-on-year to Rs 42,903 crore at the end of June. The micro banking portfolio increased 16.8% to Rs 21,371 crore.
The Reserve Bank of India in April returned Ujjivan’s application for a voluntary transition into a universal bank, stating the lender’s loan book needed greater diversification beyond its microfinance concentration without giving any specific threshold.
Ujjivan on Thursday reported a threefold jump in first-quarter net profit to Rs 317 crore compared to Rs 103 crore in the year-ago period, largely helped by 43% lower provisions. Operating profit increased 52% to Rs 548 crore, backed by a 38% rise in net interest income to Rs 1,186 crore.
The bank’s return on assets was 2.2% for the quarter, up 131 basis points year-on-year while it had given a guidance of 1.8-2% return on assets for the entire fiscal.
A basis point is a hundredth of a percentage point.
Its net interest margin for the quarter increased to 8.5%, up 80 basis points year-on-year. The gross non-performing assets ratio further improved to 2.2% at the end of June, 36 basis points lower than what it was a year ago.
The bank’s total deposits increased 24.6% year-on-year to Rs 48,129 crore.
