Ujjivan Small Finance Bank Q1 Results Review- Incremental Trends In Micro Banking Would Be Key: Yes Securities

Yes Securities Report

Ujjivan Small Finance Bank Ltd. delivered a beat of 10% on our profit after tax estimate for the quarter, despite a 4% miss on net interest margin, on the back of 3% QoQ decline in opex (essentially on lower non-employee cost) and better-than-expected credit cost (gross non-performing loan coverage was maintained though).

The moderated loan growth performance (gross loan book up 1% QoQ/18.7% YoY) was underpinned by cautious disbursement/new customer acquisition approach in Micro Banking (GL/IL disbursement down 21-23% QoQ) and transitory impact on affordable housing disbursements (down 39% qoq) due to alignment with RBI’s April-end circular.

Ujjivan SFB’s deposit growth was healthy (3.3% QoQ/22% YoY) aided by sustained robust traction in Retail TD (substantial wholesale deposits were redeemed in the quarter). Current account and savings account deposits were maintained in absolute terms despite challenging market conditions and no change in SA rate structure.

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