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Ujjivan Small Finance Bank Ltd

| Quarterly Financial Results Q3 FY 2025-26

BULLISH SENTIMENT

Report Source

⬤22nd Jan 26

Summary : Ujjivan Small Finance Bank reported strong unaudited financial results for Q3 and 9M FY26, showing growth in income and profit, maintaining robust capital, and pursuing a Universal Banking License.

Quarterly Report Analysis & Insights

Financial Disclosures

  1. Interest expended: 75,145 Lakh (Q3 FY26), 2,27,498 Lakh (9M FY26).
  2. Operating expenses: 85,615 Lakh (Q3 FY26), 2,38,340 Lakh (9M FY26).
  3. Provisions (other than tax) and contingencies: 19,534 Lakh (Q3 FY26), 65,525 Lakh (9M FY26).
  4. Tax expense: 5,874 Lakh (Q3 FY26), 12,962 Lakh (9M FY26).
  5. Total Income: 2,04,740 Lakh (Q3 FY26), 5,85,391 Lakh (9M FY26).
  6. Interest/discount on advances/bills: 1,54,759 Lakh (Q3 FY26), 4,41,914 Lakh (9M FY26).
  7. Income on investments: 19,943 Lakh (Q3 FY26), 61,431 Lakh (9M FY26).
  8. Other Income: 29,548 Lakh (Q3 FY26), 80,082 Lakh (9M FY26).
  9. Floating provision of Rs. 18,067 lakh.
  10. Stressed Assets (SRs) outstanding of Rs. 1,608.84 lakh, fully provided.
  11. Paid up equity share capital: 1,93,846 Lakh (Dec 31, 2025).
  12. Net worth: 6,51,854 Lakh (Dec 31, 2025).
  13. Total Assets: 52,29,885 Lakh (Dec 31, 2025).
  14. Total Liabilities: 45,78,031 Lakh (Dec 31, 2025).
  15. Gross NPAs: 87,939 Lakh (Dec 31, 2025), 2.38% of gross advances.
  16. Net NPAs: 20,808 Lakh (Dec 31, 2025), 0.57% of net advances.
  17. Capital Adequacy Ratio (BASEL II): 21.62% (Dec 31, 2025).
  18. Standalone financial results for Ujjivan Small Finance Bank Limited.

Corporate Overview

  1. Domestic operations within India only.
  2. Incremental provision of 1,829 lakh for 'Employees cost' due to new Labour Codes.
  3. Managing asset quality with Gross NPAs at 2.38% and Net NPAs at 0.57%.
  4. Adherence to Reserve Bank of India (RBI) guidelines and regulations.
  5. Small Finance Bank operating in India.
  6. Segments include Treasury, Retail Banking, and Wholesale Banking.
  7. Positive and forward-looking, emphasizing compliance and strategic growth.
  8. Retail customers (Retail Banking segment).
  9. Corporates and Financial Institutions (Wholesale Banking segment).
  10. Treasury: Net interest earnings from investment portfolio, money market borrowing/lending, gains/losses on investment operations, PSLC income/loss.
  11. Retail Banking: Serves retail customers via branches, lending, deposits, processing fees, PSLC income/loss.
  12. Wholesale Banking: Provides loans to Corporates and Financial Institutions, interest earned on loans.
  13. Capital Adequacy Ratio (BASEL II) at 21.62% as of December 31, 2025.
  14. Submitted application for Universal Banking License to RBI on February 4, 2025.

Risk Factors

  1. New Labour Codes increase employee costs.
  2. Managing asset quality and floating provisions.
  3. Adherence to evolving RBI regulations.
  4. Intense competition in banking sector.

Key Drivers

  1. Applied for Universal Banking License.
  2. Maintained strong capital adequacy ratio.
  3. Reported growth in income and profit.
  4. Implementing digital banking initiatives.

Auditor’s Report

  1. Unmodified conclusion on the unaudited financial results.

Board Commentary

  1. Floating provision of Rs. 18,067 lakh, impacting Net NPA calculation and provision coverage ratio.
  2. Stressed Assets (SRs) outstanding of Rs. 1,608.84 lakh, fully provided for.
  3. Compliance with Regulation 30 and 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
  4. Compliance with Accounting Standard 25 and Section 133 of Companies Act, 2013.
  5. Employee Stock Option Plan (ESOP) 2019: 17,38,78,902 options granted, 34,59,474 equity shares allotted.

Corporate Governance

  1. Adherence to accounting principles generally accepted in India.
  2. Compliance with RBI Regulations and SEBI Listing Regulations.
  3. Audit Committee reviewed financial results.
  4. Board of Directors approved financial results.

Management Discussion & Analysis

Future Strategy

  1. Implementing Digital Banking as a separate sub-segment of Retail Banking.
  2. Pursuing Universal Banking License for broader operations.

Industry Overview

  1. Digital Banking identified as a sub-segment under Retail Banking by RBI.

Operational Focus Areas

  1. Compliance with new Labour Codes and re-assessment of cost impact.
  2. Adherence to RBI guidelines for Small Finance Banks.

Performance Drivers

  1. Growth in interest earned and other income.
  2. Effective management of operating expenses and provisions.

Risk Control Measures

  1. Impact of Labour Codes to be re-assessed and finalized based on rules and industry practices.
  2. Maintaining floating provisions for asset quality management.

Critical Risks

  1. Impact of new Labour Codes on employee costs.
  2. Potential changes in RBI guidelines and accounting standards.
  3. Asset quality management and provisioning requirements.
Ujjivan Small Finance Bank Ltd (UJJIVANSFB) Quarterly Report Analysis & Insights | Dhanarthi