Ujjivan Small Finance Bank reported a 5% dip in net profit to ₹693 crore for FY26, despite a 12% rise in total income. The bank saw significant deposit growth and diversification in its loan book.
Ujjivan Small Finance Bank FY26 Results: Net Profit Down 5%, Deposits Surge 21%
Net Profit: ₹693 Crore Total Income: ₹8,039 Crore Reader Takeaway: Diversified lending and strong deposit growth offset microfinance sector stress. ## What just happened Ujjivan Small Finance Bank reported its financial results for the fiscal year 2025-26. The bank's Net Profit After Tax (PAT) stood at ₹693 crore, a 5% decrease from ₹726 crore in the previous fiscal year. Total income saw a 12% increase, reaching ₹8,039 crore. ## Why this matters Despite a dip in net profit, attributed to higher credit costs in the microfinance segment, the bank showcased resilience through significant growth in total income and a substantial 21.4% increase in total deposits, reaching ₹45,668 crore. The diversification of its loan book into secured lending segments also presents a positive outlook for future stability. ## The backstory Ujjivan Small Finance Bank has been strategically shifting its focus towards secured lending while managing the inherent challenges in the microfinance sector. This transition involves balancing growth in newer segments with the performance of its traditional business. ## What changes now The bank's strategy appears to be yielding results in diversification, with secured lending now comprising nearly half of its loan book. The growth in segments like vehicle finance, gold loans, and MSME loans indicates a broadening revenue base. The improved CASA ratio to 28.6% strengthens its funding profile. ## Risks to watch The primary concern remains the elevated credit costs and provisioning requirements in the microfinance segment, although management suggests stabilization. Continued monitoring of asset quality, particularly in the microfinance portfolio, will be crucial. ## Peer comparison While specific peer data is not provided in the filing, Ujjivan SFB's performance in deposit growth and diversification can be benchmarked against other small finance banks focusing on similar growth strategies. ## Context metrics (time-bound) - Total Balance Sheet: ₹57,541 Crore - Gross Loan Book: ₹40,655 Crore - Net Interest Margin (NIM): 8.1% - Gross NPA: 2.3% - Net NPA: 0.4% - Capital Adequacy Ratio (CAR): 21.14% ## What to track next Investors will be keen to observe the ongoing stabilization in the microfinance segment and the sustained growth in secured lending categories. Further improvements in profitability and asset quality metrics will be key indicators.
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