Ujjivan Small Finance Bank Posts ₹7,932 Crore Disbursements in Q2

Ujjivan Small Finance Bank reported a 48% year-on-year decline in net profit for the September quarter, falling to ₹121.7 crore from ₹233 crore a year earlier. Despite the drop, the figure exceeded CNBC-TV18’s estimate of ₹117 crore, supported by steady margins and improved asset quality.

The bank also recorded its highest-ever quarterly disbursements, reflecting strong operational momentum. Asset quality and cost of funds showed sequential improvement, contributing to overall financial stability.

Profit and Income Performance

Net interest income stood at ₹921.7 crore, slightly above expectations but lower than ₹944 crore in the same quarter last year. Interest income rose 6.7% sequentially to ₹1,682 crore, while net interest income grew 7.7% quarter-on-quarter, reversing a three-quarter declining trend.

Pre-provision operating profit increased 9.6% to ₹395 crore, and profit after tax rose 18.2% sequentially. The improvement in profitability metrics reflects effective balance sheet management and sustained lending momentum across segments.

Asset Quality and Deposit Growth

Gross non-performing assets declined to 2.45% from 2.52% in the previous quarter, while net NPA fell to 0.67% from 0.70%. Total deposits rose to ₹39,211 crore, up 15.1% year-on-year and 1.5% quarter-on-quarter.

CASA deposits increased 22.1% year-on-year and 14.9% sequentially to ₹10,783 crore, pushing the CASA ratio to 27.5%. The cost of funds eased to 7.3% from 7.6%, indicating improved funding efficiency and stronger deposit mobilisation.

Lending and Portfolio Expansion

The bank recorded its highest-ever quarterly disbursements at ₹7,932 crore, a 47.6% increase year-on-year and 21.3% quarter-on-quarter. The secured loan book expanded to ₹16,173 crore, forming 47% of total advances compared with 35% a year earlier.

Collection efficiency in micro-banking averaged 99.48%, while slippages dropped to ₹278 crore. These improvements demonstrate enhanced portfolio quality and prudent risk management practices.

Customer Base and Operational Metrics

Ujjivan’s customer base reached 98.8 lakh, up 8% year-on-year and 2.1% quarter-on-quarter. The growth in customer acquisition and lending reflects the bank’s continued focus on expanding its reach and strengthening its retail banking operations.

Digital adoption and branch expansion contributed to higher transaction volumes and customer engagement, reinforcing the bank’s retail-focused strategy.

Read More: Ujjivan SFB Plans to Raise ₹2000 Crore via QIP

Conclusion

Ujjivan Small Finance Bank’s Q2 performance highlights a mix of challenges and resilience. While net profit declined year-on-year, sequential improvements in profitability, asset quality, and disbursements indicate operational strength.

The bank’s focus on secured lending and deposit growth supports its long-term strategy. Investors will be watching future quarters for sustained recovery and growth momentum as the bank continues to consolidate its position in India’s small finance banking segment.

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