Ujjivan Sfb plans to restructure 7-8% of loans by Q2fy22


Ujjivan Small Finance Bank reported earnings for the quarter ended in June. The bank recorded a net loss of Rs 233 crore for the first quarter ended June 30 and the highest gross NPA ratio on record, even after the big cancellation it undertook. His total income from April to June 2021 fell 8% to Rs 717 crore, from Rs 775 crore during the period last year. Net interest income fell 16% to Rs 384 crore from Rs 458 crore during the period last year. The bank’s gross non-performing assets (APM) climbed to 9.8% of gross advances as of June 30, 2021, from 1% at end-June 2020. Net ANPs, or bad debts, also increased to 2.7% . 0.2 percent. Nitin Chugh, Managing Director and CEO of Ujjivan Small Finance Bank, discussed the final results.

The bank had planned a restructuring, which began in the second half of June. “In July, we restructured Rs 500 crore. So we expect about 7-8% of the book to be restructured by the end of the second quarter and that will be a work in progress, ”he said.

“As things have improved in July, we are absolutely optimistic that things will improve from now on; customers have also started to reimburse, ”he explained.

In Kerala the bank has a very small wallet of around Rs 210 crore. However, Tamil Nadu and Karnataka had a remarkable recovery in July, he said.

Demand has certainly returned. “If there is demand, if there is good quality credit available, we don’t see any problem with the growth. We are targeting growth of around 20 to 25%, and I maintain that three good quarters for us will get us through good growth momentum. This is what we saw in July, which reaffirms the whole hypothesis that growth will not disappear, ”he explained.

Regarding NPAs, he said the bank had barely added 40,000 accounts to NPAs compared to earlier when the numbers were in lakhs.

Regarding the timing of reverse mergers, he said: “For now, based on the latest communication we received from the Association’s Reserve Bank of India (RBI), we could apply three months before the end of our fifth year, which is around Jan 31, 2022. We would apply to RBI in the first week of November and go through a lot of formalities and procedural approvals before we do and after that as well , there are several regulatory approvals and milestones to be completed. So in all, between 9 and 12 months is what we expect this whole process to take to be completed.

(With PTI entries)

For the full interview, watch the accompanying video.

(Edited by : Dipika gosh)

First publication: STI

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