Ujjivan Small Finance Bank on Friday reported a net loss of Rs 233 crore for the first quarter ended June 30, mainly due to the impact of the second wave of the pandemic on its business.
The bank had posted a net profit of Rs 55 crore in the corresponding quarter of the last financial year.
The bank’s gross non-performing assets (NPAs) shot up to 9.8 percent of the gross advances as of June 30, 2021, as against 1 percent at the end of June 2020. Net NPAs, or bad loans, also rose to 2.7 percent from 0.2 percent.
Provisions and contingencies for the quarter moved up by 147 percent to Rs 396 crore, from Rs 160 crore. Also, the lender’s total expenditure jumped 32 percent to Rs 950 crore, compared with Rs 720 crore a year ago.
Total disbursements during the June 2021 quarter rose to Rs 1,311 crore, from Rs 474 crore a year ago. Ujjivan Small Finance Bank MD and CEO Nitin Chugh said, “The onset of the second COVID-19 wave and consequent restrictions and lockdowns lashed the industry, especially the microbanking sector that faced a severe stress.”
He added that the bank’s business and collection volumes were affected due to the restrictions on movement, resulting in a subdued overall performance in the June 2021 quarter.
As a precautionary measure, a floating provision of Rs 250 crore has been created to absorb the impact of potential slippages in near future, he said. “We are hopeful that our customers will resurrect their livelihoods,” Chugh said.
