Ujjivan Bank Eyes Transition Amid Profit Dip

Ujjivan Small Finance Bank reported a 64% decline in Q3 net profit due to increased bad loan provisions. While the income saw a rise, asset quality worsened. The bank is set to apply for a universal bank transition with changes in liability strategy and product offerings to target affluent customers.

Ujjivan Small Finance Bank has experienced a significant 64 percent drop in net profit, landing at Rs 103 crore for the third quarter ending December 2024, primarily due to a surge in provisions for bad loans. This marks a decrease from the Rs 300 crore net profit reported during the same period last year.

Despite the profit decline, the bank's total income increased to Rs 1,763 crore from Rs 1,655 crore year-over-year, as detailed in a recent regulatory filing. Ujjivan is preparing to seek Reserve Bank approval for transitioning to a universal bank, backed by board consent.

The bank's interest income climbed to Rs 1,591 crore, up from Rs 1,471 crore, although gross non-performing assets deteriorated, rising to 2.68 percent. The bank's strategy includes adjusting its liabilities focus toward affluent segments and pursuing new product developments following its AD-1 licence acquisition.

(With inputs from agencies.)