JANA SMALL FINANCE BANK LTD. 2022-23 Annual Report Analysis

Mon, 19 Feb

JANA SMALL FINANCE BANK LTD. has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the bank during the year 2022-23.

JANA SMALL FINANCE BANK LTD. Income Statement Analysis

• Interest income during the year rose 12.8% on a year-on-year (YoY) basis.
• Interest expenses were up by 5.9% YoY during the same period.
• Operating expenses increased by 12.8% YoY during the year.
• The bank's net interest income (NII) increased by 19.4% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a decline and stood at 7.2% in FY23 as against 7.7% in FY22.
• Other income increased by 86.1% YoY during the year.
• Net profit for the year increased by 1365.1% YoY.
• Net profit margins during the year increased to 8.3% in FY23 from 0.6% in FY22.

JANA SMALL FINANCE BANK LTD. Income Statement – 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Interest Income	Rs m	27,265	30,750	12.8%
Other Income	Rs m	3,358	6,249	86.1%
Interest Expense	Rs m	13,368	14,150	5.9%
Net Interest Income	Rs m	13,898	16,600	19.4%
Operating Expense	Rs m	11,388	12,845	12.8%
Pre-provision Operating Profit	Rs m	5,868	10,004	70.5%
Provisions & Contingencies	Rs m	5,693	7,444	30.8%
Profit before tax	Rs m	175	2,560	1365.1%
Tax	Rs m	0	0	0.0%
Profit after tax	Rs m	175	2,560	1365.1%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	7.7	7.2
Net profit margin	%	0.6	8.3

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JANA SMALL FINANCE BANK LTD. Balance Sheet Analysis

• The bank's deposits during FY23 stood at Rs 163.3 bn as compared to Rs 135.4 bn in FY22, thereby witnessing an increase of 20.7%.
• Advances for the year stood at Rs 177.6 bn as compared to Rs 130.1 bn during FY22, a rise of 36.5%.
• Cost of deposits for JANA SMALL FINANCE BANK LTD. fell 10.7% and stood at 6.1%, while yield on advances fell to 15.3%.
• The lender's investments rose to Rs 52.2 bn during the year from Rs 50.7 bn in FY22.
• Borrowing stood at Rs 62.8 bn, a growth of 39.2% as compared to previous year.
• Overall, the total assets and liabilities for FY23 stood at Rs 256.4 bn as against Rs 201.9 bn during FY22, thereby witnessing a rise of 27.0%.

JANA SMALL FINANCE BANK LTD. Balance Sheet – as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	11,846	17,771	50.0%
Advances	Rs m	130,067	177,596	36.5%
Deposits	Rs m	135,365	163,340	20.7%
Yield on advances	%	18.5	15.3
Cost of Deposits	%	6.9	6.1
Investments	Rs m	50,653	52,212	3.1%
Borrowings	Rs m	45,098	62,775	39.2%
Total Assets	Rs m	201,887	256,437	27.0%

Current Valuations for JANA SMALL FINANCE BANK LTD.

• The trailing twelve-month earnings per share (EPS) of the bank stands at Rs 46.6, an improvement from the EPS of Rs 3.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs {{shareprice}}, stands at 0.0 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 0.0 times, while the price to income ratio stands at 0.0 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Income per share (Unadj.)	Rs	530.4	559.3
Earnings per share (Unadj.)	Rs	3.4	46.6
Diluted earnings per share	Rs	1.7	24.5
Avg P/E ratio	Rs	0.0	0.0
Avg P/ABV ratio	Rs	0.0	0.0
Avg Market Cap	Rs	0	0
Dividends per share (Unadj.)	Rs	0.00	0.00

Ratio Analysis for JANA SMALL FINANCE BANK LTD.

• Efficiency Ratios

  Credit/Deposit Ratio: The bank's credit/deposit ratio improved and stood at 108.7x during FY23, from 96.1x during FY22. The credit/deposit ratio tells us how much money a bank has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The bank's debt to equity ratio decreased and stood at 12.72x during FY23, from 15.23x during FY22. The debt to equity ratio of a bank tells us how much debt a bank uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): JANA SMALL FINANCE BANK LTD.'s capital adequacy ratio (CAR) was at 2.6% as on 31 March 2023 as compared to 15.3% a year ago. This ratio helps measure the financial strength of the bank or any finance company to meet their obligations using their assets and capital.

  A bank that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the bank's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a bank sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the bank is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that banks hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the bank improved and stood at 14.4% during FY23, from 1.5% during FY22. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the bank improved and stood at 1.00% during FY23, from 0.09% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the bank improved and stood at 9.70% during FY23, from 7.28% during FY22. The ROCE measures the ability of a bank to generate profits from its total capital (shareholder capital plus debt capital) employed in the bank.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a bank's gross NPAs to gross advances. JANA SMALL FINANCE BANK LTD.'s gross NPA ratio stood at 3.9% as of 31 March 2023 compared to 5.7% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a bank's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the bank has made provisions.

  The net NPA ratio of JANA SMALL FINANCE BANK LTD. was 2.6% in financial year 2023. This compared with 4.0% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Credit/Deposit Ratio	x	96.1	108.7
Debt to Equity Ratio	x	15.2	12.7
Loans / Deposits	x	0.3	0.4
Capital Adequacy Ratio	%	15.3	2.6
Return on Equity	%	1.5	14.4
Return on Assets	%	0.1	1.0
Return on Capital Employed	%	7.3	9.7
% of Gross NPAs	%	5.7	3.9
% of Net NPAs	%	4.0	2.6
Yield on Advances	x	18.5	15.3
Yield on Investments	x	5.1	6.3

To see how JANA SMALL FINANCE BANK LTD. has performed over the last 5 years, please visit here.

JANA SMALL FINANCE BANK LTD. Share Price Performance

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Overall, the S&P BSE SENSEX is {{bsesensexupdown}} {{bsesensexchgpercabs}} over the year.

(To know more, you can check out historical annual results for JANA SMALL FINANCE BANK LTD. here and quarterly results for JANA SMALL FINANCE BANK LTD. here)

Read: Latest Annual Report Analysis of JANA SMALL FINANCE BANK LTD.