UJJIVAN SMALL FINANCE BANK 2021-22 Annual Report Analysis

Thu, 31 Mar

UJJIVAN SMALL FINANCE BANK has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the bank during the year 2021-22.

UJJIVAN SMALL FINANCE BANK Income Statement Analysis

• Interest income during the year rose 0.2% on a year-on-year (YoY) basis.
• Interest expenses were down by 3.6% YoY during the same period.
• Operating expenses increased by 21.6% YoY during the year.
• The bank's net interest income (NII) increased by 2.6% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a decline and stood at 8.7% in FY22 as against 10.2% in FY21.
• Other income increased by 3.6% YoY during the year.
• Net profit for the year declined by 5096.9% YoY.
• Net profit margins during the year declined to -14.7% in FY22 from 0.3% in FY21.

UJJIVAN SMALL FINANCE BANK Income Statement – 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Interest Income	Rs m	28,061	28,128	0.2%
Other Income	Rs m	3,023	3,133	3.6%
Interest Expense	Rs m	10,775	10,392	-3.6%
Net Interest Income	Rs m	17,286	17,736	2.6%
Operating Expense	Rs m	12,301	14,964	21.6%
Pre-provision Operating Profit	Rs m	8,008	5,905	-26.3%
Provisions & Contingencies	Rs m	7,925	10,051	26.8%
Profit before tax	Rs m	102	-5,504	-5496.7%
Tax	Rs m	19	-1,358	-7241.9%
Profit after tax	Rs m	83	-4,146	-5096.9%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	10.2	8.7
Net profit margin	%	0.3	-14.7

Don't Miss: Best Chance to Access Midcap Stocks Research at 80% OFF

UJJIVAN SMALL FINANCE BANK Balance Sheet Analysis

• The bank's deposits during FY22 stood at Rs 182.9 bn as compared to Rs 131.4 bn in FY21, thereby witnessing an increase of 39.3%.
• Advances for the year stood at Rs 163.0 bn as compared to Rs 144.9 bn during FY21, a rise of 12.5%.
• Cost of deposits for UJJIVAN SMALL FINANCE BANK fell 17.9% and stood at 4.9%, while yield on advances fell to 15.8%.
• The lender's investments rose to Rs 41.5 bn during the year from Rs 25.2 bn in FY21.
• Borrowing stood at Rs 17.6 bn, a fall of 45.7% as compared to previous year.
• Overall, the total assets and liabilities for FY22 stood at Rs 236.0 bn as against Rs 203.8 bn during FY21, thereby witnessing a rise of 15.8%.

UJJIVAN SMALL FINANCE BANK Balance Sheet – as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	31,750	27,604	-13.1%
Advances	Rs m	144,940	163,032	12.5%
Deposits	Rs m	131,358	182,922	39.3%
Yield on advances	%	17.9	15.8
Cost of Deposits	%	5.9	4.9
Investments	Rs m	25,165	41,529	65.0%
Borrowings	Rs m	32,473	17,636	-45.7%
Total Assets	Rs m	203,805	236,045	15.8%

Current Valuations for UJJIVAN SMALL FINANCE BANK

• The trailing twelve-month earnings per share (EPS) of the bank stands at Rs -2.4, a decline from the EPS of Rs 0.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 27.3, stands at -10.1 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 1.9 times, while the price to income ratio stands at 1.5 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Income per share (Unadj.)	Rs	16.2	16.3
Earnings per share (Unadj.)	Rs	0.0	-2.4
Diluted earnings per share	Rs	0.0	-2.1
Avg P/E ratio	Rs	722.3	-10.1
Avg P/ABV ratio	Rs	1.1	1.9
Avg Market Cap	Rs	59,929	41,912
Dividends per share (Unadj.)	Rs	0.00	0.00

Ratio Analysis for UJJIVAN SMALL FINANCE BANK

• Efficiency Ratios

  Credit/Deposit Ratio: The bank's credit/deposit ratio deteriorated and stood at 89.1x during FY22, from 110.3x during FY21. 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 increased and stood at 7.27x during FY22, from 5.16x during FY21. 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): UJJIVAN SMALL FINANCE BANK's capital adequacy ratio (CAR) was at 19.0% as on 31 March 2022 as compared to 26.4% 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 deteriorated and stood at -15.0% during FY22, from 0.3% during FY21. 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 deteriorated and stood at -1.76% during FY22, from 0.04% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the bank deteriorated and stood at -7.33% during FY22, from 4.51% during FY21. 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. UJJIVAN SMALL FINANCE BANK's gross NPA ratio stood at 7.3% as of 31 March 2022 compared to 7.1% 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 UJJIVAN SMALL FINANCE BANK was 0.6% in financial year 2022. This compared with 2.9% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Credit/Deposit Ratio	x	110.3	89.1
Debt to Equity Ratio	x	5.2	7.3
Loans / Deposits	x	0.2	0.1
Capital Adequacy Ratio	%	26.4	19.0
Return on Equity	%	0.3	-15.0
Return on Assets	%	0.0	-1.8
Return on Capital Employed	%	4.5	-7.3
% of Gross NPAs	%	7.1	7.3
% of Net NPAs	%	2.9	0.6
Yield on Advances	x	17.9	15.8
Yield on Investments	x	9.1	4.9

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

UJJIVAN SMALL FINANCE BANK Share Price Performance

Over the last one year, UJJIVAN SMALL FINANCE BANK share price has moved up from Rs 17.5 to Rs 27.3, registering a gain of Rs 9.8 or around 56.4%.

Meanwhile, the S&P BSE BANKEX is trading at 46,701.0 (up 2.1%). Over the last one year it has moved up from 39,542.9 to 46,701.0, registering a gain of 7,158.2 points (up 18.1%).

Overall, the S&P BSE SENSEX is up 7.8% over the year.

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

Read: Latest Annual Report Analysis of UJJIVAN SMALL FINANCE BANK