Ujjivan Small Finance Bank (UJJIVANSFB) Q3 24/25 earnings summary

Executive summary

• Secured loan book reached 39% of total, growing 52% YoY, with strong growth in affordable housing, MSME, and new products; gross loan book at ₹30,466 Cr, up 10% YoY.

• Microfinance collection efficiency improved, especially in previously stressed states; group and individual loan businesses show early recovery with volumes expected to pick up in Q4FY25.

• Interest rates on group and individual loans reduced by 115 bps and 75 bps, respectively, from January 2025 to acquire quality borrowers.

• Repeat customer disbursement contribution rose from 61% to 73% QoQ.

• Board approved application for voluntary transition to universal banking, with application planned in Q4.

Financial highlights

• PAT for Q3 was INR 109 crore; NII for Q3FY25 at ₹887 Cr, up 3% YoY; NIM at 8.6%.

• Total deposits reached INR 34,494 crore, up 16% YoY; retail deposits at INR 25,074 crore, 73% of total, up 24% YoY.

• Pre-provision operating profit (PPOP) fell 21% YoY to ₹359 Cr; PAT declined 64% to ₹109 Cr.

• Credit cost for Q3 at INR 223 crore, with an accelerated provision of INR 30 crore; credit cost surged 254% YoY in Q3FY25 due to provisions and ARC transaction.

• Cost-to-income ratio increased to 64% in Q3FY25 from 56% a year ago.

Outlook and guidance

• Secured business expected to grow by ~50% in FY25, contributing 40%-42% of the loan book by year-end.

• Overall loan book growth guided at 8%-9% for FY25.

• Credit cost guidance maintained at 2.3%-2.5% for the year; credit cost may peak in the upcoming quarter.

• Focus on improving CASA ratio and reducing cost of funds.

• NIM expected to remain steady at 8.6%-8.8%.