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Ujjivan SFB Q1 results: Net profit drops 42% YoY as provisions rise seven-fold

Kolkata: Ujjivan Small Finance Bank has reported 42% drop in net profit at Rs 55 crore for the June quarter compared with Rs 94 crore in the year ago period due to a 84% fall in loan disbursements and over seven times rise in provisionings to cover risks arising out of coronavirus pandemic.

“Concerted efforts towards business normalcy remained in full force for Q1FY21, reflecting in our improved collection efficiency of 54% for June which further rose to 59% in July,” Ujjivan’s chief executive Nitin Chugh said.

Its loan disbursement for the first quarter was at Rs 474 crore against Rs 2,959 crore in the year ago period.

Chugh said that the bank has raised its provisioning to cover risks given the challenges the lenders may face in terms of delinquency. COVID provision for the quarter was Rs 129 crore, with total cumulative provision being at Rs 199 crore. Total provision rose to Rs 140 crore as against Rs 19 crore in the year ago period.

The bank’s net interest income grew 30% at Rs 458 crore while net interest margin fell to 10.2% against 10.5% over the same period.

Gross non-performing assets ratio was at 1% at the end of June against 0.8% a year back.

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