Utkarsh Small Finance Bank drops 2% despite strong June quarter results
Utkarsh Small Finance Bank’s loan portfolio grew 31.4 per cent year-on-year to Rs 14,394 crore as on June 30, 2023. The bank said that its microfinance portfolio accounted for 63 per cent of the total loan portfolio, while non-microfinance portfolio accounted for 37 per cent of the loan book.
Utkarsh Small Finance Bank reported decent financial growth for the quarter ended June 2023 (Q1FY24), with profit jumping more than 20 per cent compared with a year ago.
The microfinance lender said that its PAT (profit after tax) stood at Rs 107 crore in Q1FY24, up 20.2 per cent compared to Rs 89 crore in the same quarter a year ago.
Net interest income (NII) also rose 20.9 per cent year-on-year to Rs 422 crore in the June quarter compared with Rs 349 crore in the year-ago period.
Despite a good set of financial numbers for the quarter ending June 30, 2023, shares of Utkarsh Small Finance Bank dropped more than two per cent in morning trade on Wednesday to a low of Rs 49.64 apiece on BSE.
Asset quality improves
With regards to the asset quality, the bank’s provisions also fell to Rs 77 crore compared with Rs 91 crore a year ago. However, they jumped when compared with Rs 34 crore of provisions in the previous quarter ended March 2023.
The bank’s net interest margin (NIM) slipped slightly to 9.2 per cent in Q1 FY24 compared with 9.7 per cent in Q1FY23.
“Re-pricing of interest rates in bank’s key lending segment (microfinance), which reflect with a lag-on-account fixed rate of interest, will have a positive impact on the bank’s yield on advances over next few quarters,” Utkarsh Small Finance Bank said in earnings note.
The bank’s gross non-performing asset (GNPA) ratio was down to 3.13 per cent in Q1FY24 compared with 3.23 per cent in the previous quarter. Net NPA ratio also improved to 0.33 per cent during the quarter compared with 0.39 per cent in Q4FY23.
Growth in loan portfolio
Utkarsh Small Finance Bank’s loan portfolio grew 31.4 per cent year-on-year to Rs 14,394 crore as on June 30, 2023. The bank said that its microfinance portfolio accounted for 63 per cent of the total loan portfolio, while non-microfinance portfolio accounted for 37 per cent of the loan book.
The bank’s deposit base also expanded, growing 35.6 per cent YoY to Rs 13,967 crore as on June 30, as the lender expanded its footprint further in the country by opening 21 banking outlets in Q1FY24.
Utkarsh Small Finance is engaged in providing banking and financial services to the unserved sections of the society. The bank’s microfinance lending activities are primarily focused in rural and semi-urban locations of the country, while its other services are spread across the country.
On Wednesday, the Utkarsh Small Finance Bank stock was trading 1.9 per cent lower at Rs 50.61 at 11:11 AM on BSE.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Retirement Planning: SIP+SWP combination; Rs 15,000 monthly SIP for 25 years and then Rs 1,52,000 monthly income for 30 years
Top Gold ETF vs Top Large Cap Mutual Fund 10-year Return Calculator: Which has given higher return on Rs 11 lakh investment; see calculations
Retirement Calculator: 40 years of age, Rs 50,000 monthly expenses; what should be retirement corpus and monthly investment
SBI 444-day FD vs Union Bank of India 333-day FD: Know maturity amount on Rs 4 lakh and Rs 8 lakh investments for general and senior citizens
EPF vs SIP vs PPF Calculator: Rs 12,000 monthly investment for 30 years; which can create highest retirement corpus
Home loan EMI vs Mutual Fund SIP Calculator: Rs 70 lakh home loan EMI for 20 years or SIP equal to EMI for 10 years; which can be easier route to buy home; know maths
11:37 AM IST