Utkarsh Small Finance Bank (UTKARSHBNK) Q4 24/25 earnings summary

Executive summary

• Gross loan portfolio grew 7.5% year-over-year to ₹19,666 crore, with a significant shift toward secured lending, now at 43% of the portfolio.

• Deposits increased 23.4% year-over-year to ₹21,566 crore, with CASA deposits up 31.2% and retail term deposits up 33.5%.

• Audited financial results for the quarter and year ended March 31, 2025, were approved, with an unmodified opinion from joint statutory auditors.

• Profit after tax for FY25 dropped sharply to ₹24 crore from ₹498 crore in FY24, mainly due to higher provisions and asset quality deterioration.

• Change in accounting policy: loan processing fees now recognized as income when due, impacting reported other income and net profit.

Financial highlights

• Net interest income rose 7% year-over-year to ₹2,023 crore, while other income surged 50% to ₹600 crore.

• Total income for FY25: ₹4,36,476.03 lakh, up from ₹3,57,875.50 lakh in FY24.

• Operating profit for FY25 was ₹1,007 crore, up 1% year-over-year, but PAT fell 95% due to a 190% increase in provisions.

• Cost-to-income ratio increased to 61.6% in FY25 from 56.4% in FY24.

• Return on average assets (ROAA) and return on average equity (ROAE) dropped to 0.1% and 0.8% respectively for FY25.

Outlook and guidance

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

• Amalgamation with holding company Utkarsh Core Invest Limited approved, subject to regulatory approvals; appointed date April 1, 2025.

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