Ujjivan Posts Record Profit of ₹365 Crore as Provisions Decline
Key Facts
Ujjivan Small Finance Bank announced on October 16 its results for the quarter ended September 2026, reporting net profit of ₹365 crore, compared with ₹122 crore in the year-earlier period. The record result coincided with a 35% increase in net interest income to ₹1,248 crore, from ₹922 crore a year earlier. Operating profit rose to ₹594 crore from ₹395 crore, up 50.4%. Provisions, by contrast, declined to ₹103 crore from ₹235 crore a year earlier. The bank said return on assets was 2.4% and return on equity was 19.7% during the quarter.
Interest income growth accompanied an expansion in the lending portfolio, with the total loan book reaching ₹45,699 crore in September, up 32.1% year on year and 6.5% from the previous quarter. The bank recorded quarterly disbursements of ₹10,495 crore, a 32.3% increase from the year-earlier period. Secured loans stood at ₹23,803 crore, accounting for 52.1% of the loan book. Affordable housing loans exceeded ₹10,000 crore for the first time, reaching ₹10,056 crore, up 31.4% year on year. These figures reflect lending expansion alongside a larger share of secured loans and affordable housing in the portfolio.
Deposits outstanding at the end of September stood at ₹50,643 crore, crossing the ₹50,000 crore threshold for the first time and rising 29.2% year on year and 5.2% quarter on quarter. Current and savings account balances totaled ₹13,176 crore, up 22.2% year on year and representing 26.0% of total deposits. The cost of funds fell 0.4 percentage points year on year to 6.9%, and was stable from the previous quarter. Management said it expects funding costs to rise gradually. Deposit growth and the annual decline in its cost provide funding indicators alongside the expansion in the loan book during the period.
Asset quality indicators improved year on year, with the gross non-performing asset ratio declining to 2.10% in September from 2.45% a year earlier, and the net ratio falling to 0.31% from 0.67%. Quarter on quarter, gross NPAs declined from 2.16% in the first quarter, and net NPAs from 0.34%. The portfolio at risk measure also fell to 3.57% from 4.44% in September 2025, a year-on-year decline of 88 basis points. Capital adequacy stood at 20.69% in September, while average daily liquidity coverage was 131% during the quarter. Management said the bank remains on track to achieve the upper end of its return on assets guidance for fiscal 2027, at 2.0%.
Separately, the board approved raising ₹409 crore through a preferential issue to the International Finance Corporation and three insurers: Bajaj Life Insurance, HDFC Life and Aditya Birla Sun Life. The issue remains subject to shareholder approval, and the bank set November 13, 2026, for an extraordinary general meeting to consider it. The bank also announced that its managing director and chief executive, Sanjeev Nautiyal, had taken early retirement for health reasons. It said the nomination and remuneration committee is working to submit a candidate for the managing director post to the regulator in due course. During the quarter, the bank launched the ASBA service for customers.
In trading, the bank’s shares closed at ₹63.48 on the BSE on October 16, down 2.17%, according to a report by PTI via HDFC Sky. This was the day the results were announced, showing higher profit and net interest income and improved non-performing loan indicators, alongside lower provisions. The disclosure also included the proposed capital increase, which awaits shareholder approval at the November meeting. At the same time, the bank maintained its return on assets guidance at the upper end of 2.0% for fiscal 2027. The shareholder vote scheduled for November 13 is the next announced milestone related to the preferential issue.