Utkarsh Small Finance Bank Reports Q1 FY26 Results

04 Aug 2025 CW Team

Operational and Financial Highlights (Q1 FY26):

Loan Book Performance: Gross loan portfolio stood at Rs 192.24 billion, registering a 2.3 per cent year-on-year (YoY) growth. The share of secured loans rose to 45 per cent of the total portfolio, up from 35 per cent a year ago.
Deposits: Total deposits grew 18.3 per cent YoY to Rs 214.89 billion, driven by a strong 33.7 per cent growth in retail term deposits. CASA deposits increased 22.5 per cent YoY to Rs 42.29 billion, taking the CASA ratio to 19.7 per cent (vs. 19.0 per cent last year).
Branch Network: The bank operates across 27 states and union territories with a network of 1,099 branches.
Asset Quality: Gross NPAs stood at 11.42 per cent (vs. 2.78 per cent YoY), while Net NPAs were at 5.00 per cent (vs. 0.26 per cent YoY).
Profitability: Pre-provision operating profit (PPoP) came in at Rs 920 million (vs. Rs 3.11 billion in Q1 FY25). The bank reported a net loss of Rs 2.39 billion in Q1 FY26, compared to a PAT of Rs 1.37 billion in Q1 FY25.
Capital Adequacy: The Capital to Risk-Weighted Assets Ratio (CRAR) remained healthy at 19.64 per cent, with Tier 1 capital at 16.71 per cent.
Credit-Deposit Ratio: Improved to 83.4 per cent as on June 30, 2025, compared to 92.7 per cent a year ago.

Govind Singh, MD & CEO of Utkarsh Small Finance Bank, stated, “During Q1 FY26, we continued our strategic pivot towards secured lending amid a challenging operating environment. Our secured loan book gained traction, growing 39 per cent YoY, reflecting our portfolio de-risking strategy. While this cautious approach impacted short-term earnings, it aligns with our long-term goal of improving asset quality. We also witnessed strong growth in retail deposits, and we remain focused on building a granular liabilities franchise and enhancing overall profitability in the coming quarters.”

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Utkarsh Small Finance Bank has announced its financial results for the quarter ended June 30, 2025. Approved at the Board meeting held on August 2, 2025, the results reflect a strategic shift towards secured lending, deposit growth, and network expansion, even as the bank reported a net loss during the quarter due to a prudent approach in the unsecured lending segment.Operational and Financial Highlights (Q1 FY26):Loan Book Performance: Gross loan portfolio stood at Rs 192.24 billion, registering a 2.3 per cent year-on-year (YoY) growth. The share of secured loans rose to 45 per cent of the total portfolio, up from 35 per cent a year ago.Deposits: Total deposits grew 18.3 per cent YoY to Rs 214.89 billion, driven by a strong 33.7 per cent growth in retail term deposits. CASA deposits increased 22.5 per cent YoY to Rs 42.29 billion, taking the CASA ratio to 19.7 per cent (vs. 19.0 per cent last year).Branch Network: The bank operates across 27 states and union territories with a network of 1,099 branches.Asset Quality: Gross NPAs stood at 11.42 per cent (vs. 2.78 per cent YoY), while Net NPAs were at 5.00 per cent (vs. 0.26 per cent YoY).Profitability: Pre-provision operating profit (PPoP) came in at Rs 920 million (vs. Rs 3.11 billion in Q1 FY25). The bank reported a net loss of Rs 2.39 billion in Q1 FY26, compared to a PAT of Rs 1.37 billion in Q1 FY25.Capital Adequacy: The Capital to Risk-Weighted Assets Ratio (CRAR) remained healthy at 19.64 per cent, with Tier 1 capital at 16.71 per cent.Credit-Deposit Ratio: Improved to 83.4 per cent as on June 30, 2025, compared to 92.7 per cent a year ago.Govind Singh, MD & CEO of Utkarsh Small Finance Bank, stated, “During Q1 FY26, we continued our strategic pivot towards secured lending amid a challenging operating environment. Our secured loan book gained traction, growing 39 per cent YoY, reflecting our portfolio de-risking strategy. While this cautious approach impacted short-term earnings, it aligns with our long-term goal of improving asset quality. We also witnessed strong growth in retail deposits, and we remain focused on building a granular liabilities franchise and enhancing overall profitability in the coming quarters.”

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