Ujjivan SFB Q4 net profit grows 15%, NIM improves

Micro-lender Ujjivan Small Finance Bank (Ujjivan SFB) share price received a boost from strong operating performance during Jan-Mar quarter.
It’s shares rallied 6% to Rs 28.25 on NSE after reporting a 15% rise in net profit to Rs 73.15 crore for the fiscal fourth quarter ended March 2020. It had posted a net profit of Rs 63.78 crore in the year-ago period.
Total income rose to Rs 809.65 crore during the quarter under review from Rs 602.23 crore in the corresponding quarter a year ago.
Net Interest Income up 45.9% to Rs 466.6 crore. Net interest margin (NIM) was at 11.2% in the quarter as against 10.8% a year ago.

The Gross NPA was 0.97% during the quarter as against 0.95% in December quarter while Net NPA was 0.2% as compared to 0.38% in the previous quarter.
The micro lenders total provisions at Rs 97 crore show eightfold increase from Rs 12.4 crore in the previous quarter. This is due to Rs 70 crore provisions on account of Covid-19.
Ujjivan expects the mass market to show resilience and recover strongly and the economic package announced by government would also boost recovery and open various opportunities.
Ujjivan Financial Services is the holding company and promoter of Ujjivan SFB.

Company has stated that 100% of its micro finance loans are under morortrium. The ,amagement has stated that it has spoken to 5 mn customers out of 5.4 mn customers and believe that provisions made are adequate
1/3rd of the customers have paid the bank is via digital while deposits are stable even after fall in rates
Top 10 depositors account for 17-18%, and cooperative banks are big depostirs
On the morortorium exit deadline of 31st May, the management expects that this will not impact it badly as economic activity is expected to pick up except red zones country normalising

For the company RED ZONE is 40% of portfolio ; 16% is green zone
On Growth no guidance given but is expected that it will be gradual . where the company is optimistic as mfi is mainly repeat business. As a strategy will will do contactless lending and constantly speak to customers which all believe is a temporary disruption.
Compan to not add new people as on date

In the housing finance the company has a 40% LTV and where its focus will be on its existing customers
The company has the highest cover of 80% – with highest PCR; coverage is 1.6%
Company expects rural economy to come back soon, given normal monsoons.

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