Ujjivan Small Finance Bank Q1 Review - Incremental Bad Loan Formation Remained Elevated: ICICI Securities
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ICICI Securities Report
Ujjivan Small Finance Bank Ltd. reported net loss of Rs 2.3 billion largely due to accelerated provision of Rs 4.7 billion, including creation of Rs 2.5 billion floating provision to absorb near-term stress.
However, the same is utilised while arriving at net non-performing loan of 2.7% as at June 2021.
Considering partial or full income loss of its customer base during Covid-19 second wave, the bank expects incremental restructuring of ~7-8% by September 2021.
Current restructured pool stands at 5.5% of advances with collection efficiency at 50% as at June 2021.
With gradual opening up of the economy, collections improved sharply to 93% in July-21 from 78% in June-21 across product categories.
Ujjivan SFB’s journey towards building secured assets and granular liability franchise is progressing well.
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