Date: August 01, 2026

Financial Performance Overview

Utkarsh Small Finance Bank reported a net loss of ₹34 crore for Q1 FY27 (quarter ended June 30, 2026), representing an 86% improvement compared to the net loss of ₹239 crore in Q1 FY26. The net loss also improved from ₹188 crore in Q4 FY26.

Pre-provision operating profit stood at ₹64 crore in Q1 FY27, showing significant improvement from ₹12 crore in Q4 FY26, though lower than ₹92 crore in Q1 FY26.

Business Growth Metrics

Disbursements:

  • Total disbursements grew by 48.5% YoY in Q1 FY27
  • JLG (Joint Liability Group) disbursements grew by 4.5% YoY
  • Non-JLG disbursements grew by 92.9% YoY

Loan Portfolio:

  • Gross Loan Portfolio grew by 2.0% YoY to ₹19,610 crore
  • Quarter-over-quarter growth of 1.4%
  • Share of secured lending increased from 45% as on June 30, 2025 to 51% as on June 30, 2026
  • Within micro-banking, MBBL (Micro-Banking Business Loans) portfolio grew 147% YoY and now accounts for over 30% of the segment

Deposit Performance:

  • Total deposits grew by 2.6% YoY to ₹22,054 crore
  • Quarter-over-quarter growth of 1.8%
  • Retail term deposits grew by 14.7% YoY to ₹13,393 crore
  • CASA deposits grew by 15.1% YoY to ₹4,867 crore
  • CASA ratio improved to 22.1% as on June 30, 2026 from 19.7% as on June 30, 2025
  • Share of institutional term deposits decreased to 17.2% from 26.0% YoY
  • CASA plus Retail TD ratio improved to 83% from 74% a year ago

Asset Quality & Risk Metrics

NPA Ratios:

  • Gross NPAs improved to 5.9% as on June 30, 2026 from 11.4% as on June 30, 2025 (7.6% as on March 31, 2026)
  • Net NPAs improved to 2.8% as on June 30, 2026 from 5.0% as on June 30, 2025 (3.2% as on March 31, 2026)
  • Credit cost improved to 2.3% in Q1 FY27 from approximately 8.5% in Q1 FY26 (620 bps improvement)

Collection Efficiency:

  • JLG X-bucket collection efficiency remained strong at 99.7%
  • SMA pools declined meaningfully
  • Fresh NPA slippages (net of recoveries and upgradations) reduced to approximately ₹125 crore from approximately ₹400 crore in Q1 FY26

Credit Risk Mitigation:

  • CGFMU (Credit Guarantee Fund for Micro Units) coverage for eligible JLG & MBBL disbursements
  • Approximately 60% of microfinance portfolio covered (increasing to ~80% upon inclusion of Q1 FY27 disbursements)
  • CGFMU scheme provided approximately ₹75 crore mitigation in P&L impact during the quarter

Margin & Profitability Metrics

  • Cost of Funds (CoF) improved by approximately 40 bps YoY to 7.7%
  • Net Interest Margin (NIM) expanded by approximately 20 bps YoY to 6.1% in Q1 FY27
  • Credit-Deposit ratio was 83.8% as on June 30, 2026 vs. 83.4% as on June 30, 2025

Capital Adequacy

  • CRAR stood at 17.4% as on June 30, 2026, well above the regulatory threshold of 15%
  • Tier 1 capital stood at 15.1% as on June 30, 2026

Operational Highlights

  • Presence across 27 States & Union Territories
  • Network of 1,110 branches
  • Ongoing investments under Utkarsh 2.0 technology transformation project enabling greater automation, digital underwriting and 360-degree portfolio monitoring capabilities

Management Commentary

Mr. Govind Singh, MD & CEO, stated that Q1 FY27 marked a significant step forward in the Bank's recovery and transformation journey. The Bank remained focused on strengthening franchise quality, improving collections, enhancing portfolio resilience, and building a more diversified balance sheet. Strategic actions undertaken over the last year are translating into tangible improvements across business momentum, asset quality, portfolio diversification, funding costs, and overall operating performance. The Bank is deliberately pivoting towards secured, higher-yield and lower-risk portfolios, with secured assets now constituting 51% of the gross loan book.

The Bank remains well-positioned to drive sustainable growth, improve profitability, and create long-term value for all stakeholders, backed by ongoing technology investments and a capital adequacy ratio of 17.4%.