Utkarsh Small Finance Bank Reports Net Loss of ₹239 Crore in Q1 FY26 Amid Rising NPAs
The reported net loss and the sharp rise in NPAs are critical financial indicators that directly impact the bank's financial health, investor confidence, and future operational outlook, making the impact high.
The bank reported a significant net loss of ₹239 crore and a substantial increase in both Gross and Net Non-Performing Assets (NPAs), indicating a deterioration in profitability and asset quality for the quarter.
Utkarsh Small Finance Bank Limited announced its un-audited financial results for the quarter ended June 30, 2025, approved by its Board of Directors on August 2, 2025.
Key highlights for Q1 FY26 include: * The bank reported a net loss of ₹239 crore in Q1 FY26, compared to a Profit After Tax (PAT) of ₹137 crore in Q1 FY25. * Operating profit (pre-provisions) stood at ₹92 crore in Q1 FY26, a significant decrease from ₹311 crore in Q1 FY25. * Gross Loan portfolio grew by 2.3% year-on-year (YoY) to ₹19,224 crore. * Deposits grew by 18.3% YoY to ₹21,489 crore, driven by a 33.7% YoY growth in Retail Term Deposits (RTD) to ₹11,675 crore and CASA deposits growing by 22.5% YoY to ₹4,229 crore. * The CASA deposits ratio improved to 19.7% as on June 30, 2025, from 19.0% as on June 30, 2024. * Gross NPAs increased to 11.42% as on June 30, 2025, from 9.43% as on March 31, 2025, and 2.78% as on June 30, 2024. * Net NPAs were 5.00% as on June 30, 2025, up from 4.84% as on March 31, 2025, and 0.26% as on June 30, 2024. * The bank maintained comfortable capitalization with CRAR at 19.64% and Tier 1 capital at 16.71% as on June 30, 2025. * The share of secured loans in the overall portfolio increased to 45% as on June 30, 2025, up from 35% as on June 30, 2024. * The bank's network covers 1,099 branches across 27 States & UTs.
Mr. Govind Singh, MD & CEO, commented on the results, stating that the bank continued its strategic pivot towards secured lending amid a difficult operating environment, resulting in a 39% YoY growth in the non-JLG loan portfolio. He noted a prudent stance on new sourcing in the unsecured micro-banking segment due to recent stress indicators, which impacted short-term interest income but aligns with long-term asset quality goals. Mr. Singh also highlighted the contraction in the JLG loan portfolio due to tightened guard-rail norms. He added that the bank is working towards margin improvement and overall business scalability in the coming quarters as newly launched branches mature.
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Utkarsh Small Finance Bank Limited filed this with the NSE as a statutory disclosure, categorised under results. It is a primary document, not a recommendation, and the desk marks it high impact, which is the band that most often changes something.
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