Utkarsh Small Finance Bank shares in focus as loan book declines, but other metrics improve

Shares of Utkarsh Small Finance Bank Ltd. are in focus on Tuesday, January 6, after the lender reported its business update for the third quarter.

The bank's loan book declined by 4% to ₹18,306 crore from ₹19,057 crore last year. It was also down 1.9% from the previous quarter's ₹18,655 crore.

On the flip side, its deposits increased by 4.5% from last year to ₹21,087 crore in the December quarter from ₹20,172 crore in the year-ago period. On a sequential basis though, deposit growth was down 1.7%.

The joint liability group (JLG) loans witnessed a 34.1% decline to ₹6,419 crore from ₹9,737 crore in the previous year and a 15.7% decline from the previous quarter's

figure of ₹7,613 crore.

However, non-JLG loans increased 27.6% to ₹11,888 crore from ₹9,320 crore in the year-ago period and were up 7.7% sequentially from ₹11,042 crore.

The lender's X bucket collection efficiency improved to 99.1% from 98.6% sequentially.

For Utkarsh and other microfinance lenders, the "X" bucke refers to highly delinquent category of loans, usually significantly overdue, such as 90-days-plus or 120-days-past due, and represents the riskiest part of their asset quality or loan book.

Shares of Utkarsh Small Finance Bank ended the previous session 1.4% lower at ₹15.11 apiece. The stock has declined 45.9% in the past year.  It is down 39.56% from its IPO price of ₹25 apiece and is 48.4% from its 52-week high of ₹29.33 per share.

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