Ujjivan Small Finance Bank (UJJIVANSFB) Q2 24/25 earnings summary

Executive summary

• Gross loan book reached INR 30,344 crore, up 14% YOY and 1% QOQ as of September 2024; total deposits at INR 34,070 crore, up 17% YOY.

• Net Interest Income for Q2 FY25 was INR 944 crore, up 15% YOY; Net Profit at INR 233 crore, down 29% YOY.

• Retail deposits form 73% of total, up 32% YOY; CASA book at INR 8,832 crore, up 26% YOY and 6% QOQ.

• Results include the impact of the amalgamation with erstwhile Ujjivan Financial Services Limited, making them not comparable with prior periods.

• Affordable Housing disbursements rose 40% YOY and 70% QOQ, with the book growing 43% YOY to INR 5,784 crore.

Financial highlights

• NIM for the quarter at 9.2%, up 23 bps YOY; cost of funds at 7.5%; cost-to-income ratio at 60%.

• Pre-provision operating profit for Q2 FY25 was INR 461 crore, down 5% YOY; tax for the quarter was INR 233 crore.

• Credit cost rose sharply to INR 151 crore in Q2 FY25 from INR 47 crore in Q2 FY24.

• ROA and ROE for Q2 FY25 at 2.2% and 15.7%, respectively.

• Total income for Q2 FY25 was INR 1,82,004 lakh, up from INR 1,57,978 lakh in Q2 FY24.

Outlook and guidance

• Secured portfolio expected to grow 40%+ for the full year; individual microfinance loans to grow 17%.

• Credit cost guidance for FY25 revised to 2.3%-2.5%, with softness in return ratios expected for the year.

• ROE of 18%-20% targeted for FY26, contingent on microfinance recovery.

• Focus on expanding digital banking, analytics, and product suite to drive customer acquisition.

• Transition to new RBI investment portfolio norms from April 1, 2024, impacts comparability of investment results.