Utkarsh Small Finance Bank Strengthens Retail Franchise Amid Strategic Loan Realignment

delivered a steady performance in the September quarter, marked by a clear strategic shift toward secured lending. The bank’s Gross Loan Portfolio declined 2.3% year-on-year to ₹18,655 crore, primarily due to a 28.4% reduction in its Joint Liability Group (JLG) book to ₹7,613 crore, as the management continued to scale down exposure to the microfinance segment. Conversely, the non-JLG loan portfolio expanded 30.3% year-on-year to ₹11,042 crore, reflecting stronger traction in secured segments. On the liabilities side, total deposits rose 10% year-on-year to ₹21,447 crore, supported by robust 28.8% growth in retail term deposits to ₹12,257 crore, while bulk deposits moderated 23.5% to ₹4,712 crore. The CASA ratio improved to 20.9% from 19.6% last year, and the CASA plus retail term deposit ratio strengthened to 78% from 68.4%, underscoring a shift toward a more granular deposit base. The bank maintained sound asset quality and liquidity, with microbanking collection efficiency (excluding prepayments) at 98.6% and a Liquidity Coverage Ratio of 219%. To further enhance its capital position, the board has approved a ₹950 crore rights issue, with specific terms to be finalized on October 8. Disclaimer: This post is for informational purposes only and not a recommendation to buy or sell any securities. I, or my family, associates, or relatives, may have a financial interest in the securities mentioned.