Ujjivan SFB takes decisive step to optimize asset quality with ₹364 crore loan sale
Ujjivan Small Finance Bank (SFB) has approved the sale of a ₹364.51 crore micro banking loan portfolio to an Asset Reconstruction Company (ARC), comprising ₹294.51 crore in non-performing assets (NPAs) and ₹70 crore in technically written-off loans. With a provision coverage of 66.51%, this strategic move is aimed at fortifying the bank’s balance sheet and enhancing asset quality.
The decision follows a rise in gross NPA to 2.68% in Q3 FY25 from 2.52% in the previous quarter, while net NPA remained steady at 0.56%. Ujjivan SFB’s gross loan book expanded 9.8% YoY to ₹30,466 crore, with secured loans now constituting 39.3% of the portfolio, a significant increase from 28.3% a year ago. Operational efficiency continues to improve, with overall collection efficiency reaching 96% in December 2024 and early-stage collections (Bucket X) at 99.3%. Further details on the transaction will be disclosed upon completion.