Ujjivan Small Finance Bank to sell Rs 270 crore bad loans
ECONOMY & POLICY

Ujjivan Small Finance Bank to sell Rs 270 crore bad loans

Ujjivan Small Finance Bank, a prominent player in India’s microfinance sector, is undertaking a significant restructuring of its balance sheet by selling off bad loans worth Rs 270 crore to asset reconstruction companies (ARCs). This move is part of the bank’s strategy to clean up its financials and improve its overall asset quality. The non-performing assets (NPAs) comprise loans primarily from the bank’s microfinance portfolio, which has been under significant stress in recent months.

Out of the total Rs 270 crore in bad loans, Rs 208 crore has been classified as non-performing assets, while the remaining Rs 62 crore was written off. The bank has set aside an overall provision of 85.61% for these loans, a measure that aims to cover the potential losses from these stressed assets. Despite the provisions, Ujjivan’s asset quality has deteriorated, primarily due to challenges faced in the microfinance sector, which accounts for approximately 65% of the bank’s total loan portfolio of Rs 30,344 crore.

The bank’s gross NPA ratio has risen to 2.52%, compared to 2.35% a year ago, and its net NPA ratio stands at 0.56%, a significant increase from 0.09% in the previous year. The majority of the recent slippages, about 80%, came from the microfinance sector. Ujjivan’s move to sell off these bad loans is aimed at reducing its NPA burden and stabilizing its financial performance as it focuses on improving the health of its loan portfolio.

This sale also reflects broader challenges in India’s microfinance sector, which has seen an increase in defaults due to economic pressures on low-income households. Ujjivan, however, remains optimistic about its recovery strategy and its ability to manage asset quality moving forward.

Ujjivan Small Finance Bank, a prominent player in India’s microfinance sector, is undertaking a significant restructuring of its balance sheet by selling off bad loans worth Rs 270 crore to asset reconstruction companies (ARCs). This move is part of the bank’s strategy to clean up its financials and improve its overall asset quality. The non-performing assets (NPAs) comprise loans primarily from the bank’s microfinance portfolio, which has been under significant stress in recent months. Out of the total Rs 270 crore in bad loans, Rs 208 crore has been classified as non-performing assets, while the remaining Rs 62 crore was written off. The bank has set aside an overall provision of 85.61% for these loans, a measure that aims to cover the potential losses from these stressed assets. Despite the provisions, Ujjivan’s asset quality has deteriorated, primarily due to challenges faced in the microfinance sector, which accounts for approximately 65% of the bank’s total loan portfolio of Rs 30,344 crore. The bank’s gross NPA ratio has risen to 2.52%, compared to 2.35% a year ago, and its net NPA ratio stands at 0.56%, a significant increase from 0.09% in the previous year. The majority of the recent slippages, about 80%, came from the microfinance sector. Ujjivan’s move to sell off these bad loans is aimed at reducing its NPA burden and stabilizing its financial performance as it focuses on improving the health of its loan portfolio. This sale also reflects broader challenges in India’s microfinance sector, which has seen an increase in defaults due to economic pressures on low-income households. Ujjivan, however, remains optimistic about its recovery strategy and its ability to manage asset quality moving forward.

Related Stories

Gold Stories

Next Story
Products

Koemmerling opens Navi Mumbai experience centre

Koemmerling, a brand of the profine Group, has expanded its presence in the Mumbai metropolitan region with the opening of a new experience centre in Navi Mumbai and launched its Allure S46 minimal sliding door system for the Indian market.Located in CBD Belapur, the facility was inaugurated by Peter Mrosik, Owner and CEO, profine Group, along with Farid Khan, Chairman and Managing Director, profine India, and Kamal Bajaj, CEO, profine India.The company said the new centre will showcase its portfolio of uPVC and aluminium window and door systems to architects, developers and homeowners.The ina..

Next Story
Products

India's waterproofing market nears Rs 150 bn milestone

India's waterproofing industry is approaching a market size of Rs 150 billion and is expected to surpass the $2 billion milestone, according to speakers at the 2nd India International Waterproofers Conference & Expo 2026 organised by the Waterproofers Association of India (WAI) in New Delhi.The two-day event brought together more than 20 speakers, 55 international delegates and 53 exhibition booths, with discussions focusing on climate-resilient construction, advanced waterproofing technologies and international collaboration.Inaugurating the event, Durga Shanker Mishra, former Secretary, ..

Next Story
Real Estate

Dilip Buildcon Q1 FY27 Revenue at Rs 23.78 billion

Dilip Buildcon Limited reported consolidated revenue from operations of Rs 2,378 crore in Q1 FY27, along with EBITDA of Rs 429 crore and profit after tax of Rs 128 crore.Consolidated EBITDA margin stood at 18.1%, improving from 17.1% in Q4 FY26. On a standalone basis, revenue from operations was Rs 1,930 crore, EBITDA stood at Rs 199 crore and PAT was Rs 39 crore, with an EBITDA margin of 10.3%.The company’s order book stood at Rs 27,691 crore as of 30 June 2026, compared with Rs 28,830 crore as of 31 March 2026. Roads and highways accounted for 17.1% of the order book, irrigation and water ..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement