Utkarsh Small Finance Bank (UTKARSHBNK) Q4 22/23 earnings summary

Executive summary

• FY23 delivered record PAT of ₹404.50 crore as total income grew 37.89% YoY to ₹2,804.29 crore and asset quality improved.

• Deposits rose 36.09% to ₹13,710.14 crore and gross advances grew 31.29% to ₹13,957.11 crore, supported by network expansion and faster non-microfinance lending.

Financial highlights

• Net interest income increased 44.13% YoY to ₹1,529.03 crore; non-interest income rose 61.93% to ₹299.31 crore, supported by fees, PSLC sales and third-party product income.

• Operating profit before provisions grew 63.76% to ₹838.32 crore; operating expenses rose 34.93% to ₹990.01 crore, while cost-to-income improved to 54.15% from 58.90%.

• PAT was ₹404.50 crore versus ₹61.46 crore; provisions and contingencies were ₹433.82 crore versus ₹450.47 crore.

• Basic and diluted EPS were ₹4.52 and ₹4.51, respectively, versus ₹0.70 for both in FY22.

Outlook and guidance

• FY24 expected to be near-normal, with healthy growth and profitability; loan and deposit growth expected to return to full normalcy and credit costs to moderate from FY23 levels.

• Hardened rates and repricing of deposits and borrowings may raise funding costs; lending-rate pass-through is expected to support healthy NIMs.

• Priorities include improving loan quality, diversifying retail assets and geographies, deepening retail deposits, strengthening controls and expanding digital offerings.

• Planned growth areas include MSME, housing and vehicle loans, digital personal loans, credit cards and third-party partnerships.