Ujjivan Financial – Small Finance Bank

Hindu Interview by CEO Summary

Net NPA in Q3 From 0 → 0.16 per cent

Industry high growth for two years + two festival months in Q3.
Collections began to slacken a little bit
Punjab situation and TN floods → there’s a more bit of stress to come

60:40 mix unsecured vs secured is taking time.

last year we put together a changed model; introduced this year.
We have done that with MSME and housing;
gold is relatively new.
Model → FY25 and will begin to push the secured portfolio at a faster rate wrt FY24.
We have 16 area offices which will work like hubs and spokes.
Where – business, credit, legal, and operations teams work to get TAT (turnaround time) reduces.
Better credit monitoring.
In FY25, should see 66:33 as a split unsecured vs secured loans.

New product launches ?

Coming out in a new avatar with our secured products.
For MSME: product focus wrt working capital against long-term
Working with a couple of fintechs.
Reintroducing vehicle loans, (few pockets initially – do it well then go deep).
Focus next 2-3 yrs on our digital offering.

Would you look at acquisitions to boost your secured book?

If the secured (book) growth is not keeping pace with the targets, we will,
if secured products start firing , we may be able to delay the process.

At what stage are we in the reverse merger?

final approval from NCLT – 2-3 months.

Your universal bank aspirations?

For next three years, we will continue to be a small finance bank.
be the best small finance bank. THen we’ll find favor with the RBI for the next level.
roadmap → eventually a universal bank

There are talks of rate cuts now?

SFBs, private banks/ nationalized banks will have higher rates, irrespective of the repo rate.
For SFBs, the premium is there to stay, (we’d like to reduce that gap).
Smaller private banks are overtaking us + have reached our deposit rates.
It’s no longer a level playing field.
It depends on each one’s books and requirements.

you’re 70-years age. What after Dec 2024?

extension (for me) is out of question.
The NRC (nomination and remuneration committee) has started finding a successor.
Person is able to fall in line with the requirements and is ‘fit and proper’ , we can have external person.