Utkarsh Small Finance Bank (UTKARSHBNK) Q3 24/25 earnings summary

Executive summary

• Gross loan portfolio grew 16% year-over-year to ₹19,057 crore as of December 31, 2024, with deposits up 33% year-over-year to ₹20,172 crore.

• Share of secured loans increased to 41% of the portfolio, with improved yields in MSME and housing loans by 50-130 bps year-over-year.

• Pre-provision operating profit for 9M FY25 was ₹773 crore, up 8% year-over-year, but profit after tax dropped sharply to ₹21 crore from ₹338 crore in 9M FY24.

• Unaudited financial results for the quarter and nine months ended December 31, 2024, were approved, with an unmodified review report from joint statutory auditors.

• The bank completed its IPO in July 2023, raising ₹50,000 lakhs, and is progressing on a proposed amalgamation with its holding company, pending regulatory approvals.

Financial highlights

• Net interest income for 9M FY25 increased 20% year-over-year to ₹1,611 crore; other income rose 12% to ₹313 crore.

• Total income for the quarter ended December 31, 2024, was ₹1,03,792.38 lakhs, compared to ₹88,865.07 lakhs in the same quarter last year.

• Net loss for the quarter was ₹16,805.47 lakhs, compared to a net profit of ₹6,807.29 lakhs in the same quarter last year.

• Total provisions surged 187% year-over-year to ₹757 crore for 9M FY25, impacting net profitability.

• Operating profit before provisions and contingencies for the quarter was ₹18,526.14 lakhs, down from ₹25,615.09 lakhs year-over-year.

Outlook and guidance

• Focus on diversifying the asset portfolio, increasing the share of secured loans, and expanding into new geographies and customer segments.

• Management expects elevated provisions to continue due to stress in the MFI portfolio and has decided to halt further floating provision creation from October 1, 2024, with periodic review.

• Continued investment in technology and digital offerings to enhance customer experience and operational efficiency.