Utkarsh Small Finance Bank Limited (USFBL) has announced its financial results for the quarter and year ending at 31st March, 2025.
Despite a challenging operating environment, the Bank demonstrated strong growth in deposits and a shift toward a more secured lending portfolio.
The gross loan portfolio rose 7.5 per cent year-on-year (YoY) to Rs 19,666 crore, while deposits grew significantly by 23.4 per cent YoY to Rs 21,566 crore, driven primarily by a 33.5 per cent rise in retail term deposits. CASA deposits also saw a 31.2 per cent growth, with the CASA ratio improving to 21.8 per cent.
The Bank reported an operating profit (pre-provisions) of Rs 1,007 crore in FY25, marking a 1 per cent increase from Rs 997 crore in FY24. However, profit after tax declined sharply to Rs 24 crore in FY25, down from Rs 498 crore in the previous year. This decline was attributed to a difficult environment for joint liability group (JLG) loans following the implementation of guardrail norms, which restricted credit supply and shifted focus to collections.
Gross non-performing assets (GNPA) surged to 9.43 per cent as of March 31, 2025, compared to 2.51 per cent in the previous year. Net NPA also increased to 4.84 per cent. The bank’s capital adequacy remained strong, with CRAR at 20.93 per cent and Tier 1 capital at 17.88 per cent.
The share of secured loans in the portfolio rose from 34 per cent in March 2024 to 43 per cent in March 2025. The Bank disbursed more in housing and MSME loan products, with disbursement yields improving by 80–180 basis points year-on-year.
The bank changed its accounting policy in FY25, recognising loan processing fees and allied expenses when due instead of over the tenure of the loan, in line with industry standards.
Utkarsh SFB expanded its footprint significantly by adding over 200 branches in FY25, taking its total network to 1,092 branches across 27 states and union territories.
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