Utkarsh SFB Posts Wider Q3 Loss Amid Lower Net Income

Utkarsh Small Finance Bank's third-quarter results revealed a net loss of ₹375 crore, a considerable rise from the ₹168 crore loss reported in the same period last year. This widened loss was accompanied by a substantial 27.5% decrease in net interest income, which fell to ₹348 crore from ₹480 crore year-on-year, indicative of slower disbursement and pressure on earnings.

However, the bank demonstrated sequential improvement in asset quality. Gross non-performing assets (NPAs) declined to 11.05% from 12.42% in the previous quarter, and net NPAs eased to 4.48% from 5.02%. This suggests enhanced collection efficiency and greater stability within the loan portfolio.

The bank's management strategically slowed disbursements to focus on collections and portfolio clean-up, consequently impacting the overall loan book. During the quarter, customer engagement efforts led to savings accounts being opened for over 75% of its micro-banking customers.

While the joint liability group segment experienced a slowdown due to market disruptions, non-JLG loan portfolios saw robust 27.5% year-on-year growth, driven by a focus on secured products like MSME, housing, and gold loans. The Micro-Banking Business Loan segment also expanded significantly, with an 80% year-on-year growth in its loan book, largely supported by digital collections.

Utkarsh SFB bolstered its capital base by raising ₹950 crore through a rights issue in November 2025. Deposits grew by 5% year-on-year, with a notable 24% increase in retail term deposits, signaling improved traction in its liability franchise. As of December 2025, the bank served 5.14 million customers, maintaining yields on advances at 14.7%.