: Suryoday Small Finance Bank’s first quarter net profit soared 514 per cent year-on-year to ₹47.6 crore against ₹7.8 crore in the year ago period on the back of robust growth in other income, healthy growth in net interest income and decline in provisions and contingencies.
SSFB’s net interest income was up 27 per cent y-o-y to ₹225 crore (₹177 crore in the year ago quarter). Other income shot up 288 per cent y-o-y to ₹51 crore (₹13.2 crore). Provisions and contingencies declined 22.6 per cent y-o-y to ₹53.7 crore (₹69.3 crore).
The Bank has ~24.3 lakh customers, an increase of 21.0% over the base as at 30th June 2022
Total number of branches stood at 609, with 95 being liability-focused outlets, 325 being asset focused branches and 189 Rural Centres. Total number of employees stood at 6,386
Commenting on the performance, Mr. Baskar Babu, MD & CEO, Suryoday Small Finance Bank, said:
“FY24 has commenced on a strong footing for our bank as well as for the overall sector at large. On the industry front, RBI has maintained the status quo by retaining the Repo rate at 6.5%. RBI also mandated scheduled banks to maintain an incremental cash reserve ratio of 10% on the increase in their net demand and time liabilities (NDTL) between May 19, 2023 and July 28, 2023 as a temporarymeasure. This measure is intended to absorb the surplus liquidity within the system.
We are pleased to report that the bank’s Gross Advances grew by 24% to Rs. 6,372 Crores, with the Vikas Loan Portfolio at Rs. 1,283 crores with over 2.1 Lac customers. Vikas Loan, the bank’s flagship product, is an unsecured business loans offered to the bank’s graduating JLG customers and a substantial part of the portfolio is covered under CGFMU. The bank’s disbursements for Q1FY24 grew by 17.5% YoY and stood at Rs. 1,190 crores.
The asset quality of the bank has witnessed significant improvement with GNPA at 3% during the quarter as compared to 10% in Q1FY23, similarly, NNPA stood at 1.6% versus 5.0% in Q1FY23. The bank is confident of gradually reducing GNPA to less than 2% on the back of sustained collection momentum coupled with business growth. The bank intends to create enough contingency provision to improve the PCR as well as to bring down NNPA below 0.5% in FY24. The bank’s collection efficiency, as of Q1FY24, stands at 100.4%.
Despite one time ARC related provision, the bank has witnessed a growth of 5x Profit After Tax of Rs. 48 crores in Q1FY24, against Rs. 8 crores in Q1FY23.
Looking ahead to FY24, the bank aims to focus on growing Gross Advances by ~30%, Deposits by ~35%, achieving a Return on Assets (ROA) of ~2.2%, and a Return on Equity (ROE) of ~15%. Operationally, our key areas of focus include product diversification, maintaining GNPA level below 2.0%, creating adequate incontingency provision, leveragingdigitalinitiatives,takingCGFMU cover for JLG andVikasLoan,building a Vikas loan book of ~Rs. 2,000 crores and expanding our branch network.”