Utkarsh Small Finance Bank (UTKARSHBNK) Q4 19/20 earnings summary

Executive summary

• FY2019-20 business grew 39.40% YoY to ₹11,895 crore; PAT nearly doubled to ₹186.74 crore despite a ₹49.96 crore COVID-19 provision above regulatory requirements.

• Operations expanded to 507 outlets across 15 states and 2 union territories; customer base exceeded 25 lakh and deposits crossed ₹5,000 crore.

Financial highlights

• Total income rose 49.75% YoY to ₹1,406.24 crore; operating income increased 48.4% to ₹826.8 crore.

• Net interest income grew 46.01% to ₹728.22 crore; non-interest income increased 69.77% to ₹98.55 crore.

• Operating profit rose 51.95% to ₹350.29 crore; PAT advanced 98.89% to ₹186.74 crore, after ₹163.55 crore in provisions and contingencies.

• Net advances grew 34.56% to ₹6,281.60 crore; deposits rose 38.08% to ₹5,235.21 crore and investments increased 38.29% to ₹1,192.39 crore.

• Basic and diluted EPS were ₹2.49, versus ₹1.37 in FY2018-19.

Outlook and guidance

• Microfinance remains the core lending focus, with plans to expand into newer geographies and grow secured MSME, housing, personal, vehicle and working-capital lending.

• Increase CASA and retail term deposits to reduce funding costs; deepen deposit gathering in existing markets and top deposit locations.

• Management aims for multifold business growth over four to five years, a more balanced loan portfolio and higher secured-lending share; medium-term ambition is to become a universal bank if permitted by regulators.

• IPO readiness and promoter dilution are priorities; public listing was targeted before June 2021, subject to regulatory requirements and approvals.