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Utkarsh Small Finance Bank net profit rises 19% on strong net interest income growth
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
Net interest income (NII), which is the difference between the interest income a bank earns from its lending activities and the interest it pays to depositors, jumped 31.8%, to ₹539.9 crore against ₹409.6 crore in Q4 of FY23. Shares of Utkarsh Small Finance Bank ended at ₹59.46, up by ₹0.68, or 1.16%, on the BSE.
Varanasi-headquartered Utkarsh Small Finance Bank Ltd on Friday (April 26) reported a 19.4% year-on-year (YoY) increase in net profit at ₹159.7 crore for the fourth quarter that ended March 31, 2024. In the corresponding quarter last year, Utkarsh Small Finance Bank posted a net profit of ₹133.8 crore, the bank said in a regulatory filing.
Net interest income (NII), which is the difference between the interest income a bank earns from its lending activities and the interest it pays to depositors, jumped 31.8%, coming at ₹539.9 crore against ₹409.6 crore in Q4 of FY23.
Gross non-performing assets (NPAs) stood at 2.51% in the March quarter against 3.04% in the December quarter. Net NPAs came at 0.03% against 0.19% quarter-on-quarter (QoQ).
The banks’ gross loan portfolio grew by 31.1% year-on-year to ₹18,299 crore. Deposits grew by 27.4% YoY to ₹17,473 crore, led by retail term deposit (RTD) growth of 43% over the year-ago period.
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The bank posted its highest annual operating profit (pre-provisions) of ₹997 crore and profit after tax of ₹498 crore in FY24 (YoY growth of 23%); profit after tax during Q4, FY24 stood at ₹160 crore. Return on assets and return on equity stood at a healthy 2.4% and 19.5%, respectively during FY24.
Govind Singh, Managing Director and CEO of Utkarsh Small Finance Bank, said, “Our collection efficiency and asset quality witnessed a healthy trend in Q4, FY24 leading to a decline in credit cost as well as a reduction in net NPAs to a negligible level of 0.03% as on March 31, 2024.”
The board of directors has approved a final dividend of ₹0.50 per equity share of ₹10, which is subject to the approval of the shareholders at the ensuing annual general meeting.
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The bank’s loan portfolio grew by 31.1% year-on-year to ₹18,299 crore as of March 31, 2024. It continues to see healthy growth in the micro-banking loan portfolio as well as the build-up of secured loans i.e. MSMEs (YoY growth of 67%), housing (up 30%) and CV/CE (commercial vehicle and construction equipment), which was up 69% over the year-ago period. As a result, the bank witnessed a diversity of loan portfolio improving.
Deposits grew by 27.4% YoY to ₹17,473 crore as of March 31, 2024, led by growth in retail term deposits. Retail term deposits grew 42.9% over the year-ago period to ₹7,968 crore and the CD ratio improved to 93.7% as on March 31, 2024 versus 95.3% on March 31, 2023.
The results came after the close of the market hours. Shares of Utkarsh Small Finance Bank ended at ₹59.46, up by ₹0.68, or 1.16%, on the BSE.
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