Ujjivan SFB FY26: Deposits up 21%, GNPA at 2.27%

Key takeaway from the March 2026 update

Ujjivan Small Finance Bank has reported strong business growth for the quarter and full year ended March 31, 2026, alongside a sharp improvement in headline asset-quality indicators. The update highlights faster expansion in deposits and the gross loan book, supported by higher disbursements across key segments in Q4 FY26. The bank also disclosed a higher CASA ratio, indicating a better mix of low-cost deposits compared with the previous year. Another notable point in the update is the fall in gross non-performing assets, which declined meaningfully year-on-year. Taken together, the operating metrics signal improved collection and risk management in the latest period. These figures also matter because Ujjivan SFB has seen profitability and credit-cost volatility in earlier quarters, especially through FY25.

Deposits rise to ₹45,661 crore

Total deposits increased 21.3% year-on-year to ₹45,661 crore as of March 31, 2026. The bank also reported 8.1% sequential growth in deposits, showing momentum into the end of the fiscal year. Deposit growth is important for small finance banks because funding costs can shift quickly when competition for deposits intensifies. In earlier disclosures for FY25, the bank had highlighted higher interest outgo linked to mobilising deposits at higher costs. Against that backdrop, the FY26 deposit growth, along with a higher CASA ratio, is a key operational data point for investors tracking funding stability and margins.

Gross loan book expands to ₹40,655 crore

The bank’s gross loan book grew 26.6% year-on-year to ₹40,655 crore, with a 9.7% quarter-on-quarter rise. The combination of deposit and loan growth indicates balance-sheet expansion rather than growth driven only by one side of the book. For lenders with material microfinance exposure, the pace and composition of loan growth often shapes future credit costs and provisioning requirements. In FY25, the bank had pointed to stress in microfinance lending and elevated credit costs for the year. The FY26 operating data therefore gets read closely for signs that growth is being accompanied by better underwriting and collections.

Disbursements accelerate in Q4 FY26

Ujjivan SFB said disbursements across key segments rose 31.4% year-on-year in Q4 FY26. Within this, Gold Loan disbursements surged 292.2% and Vehicle Loan disbursements increased 101.6%. The sharp rise in these secured segments suggests strong customer demand and execution capacity in products that are typically seen as more collateral-backed than unsecured microfinance. The disclosed segment trends also help explain how the bank was able to deliver faster gross loan book growth by year-end.

Asset quality improves: GNPA falls to 2.27%

A key highlight in the March 2026 update is the improvement in asset quality. Gross Non-Performing Assets (GNPA) fell to 2.27% as of March 31, 2026, from 4.54% a year earlier. A decline of this magnitude generally signals better collection efficiency, tighter credit filters, and possibly a more favourable mix shift in the loan book. The bank’s commentary linked the improvement to better risk management and collection efficiencies. While a single metric does not capture all credit dynamics, the year-on-year drop in GNPA is one of the most important disclosures in the FY26 snapshot.

CASA ratio rises to 28.6%

The bank’s CASA ratio improved to 28.6% from 25.5% previously. CASA is a critical funding measure because a higher share of current and savings accounts can reduce the blended cost of deposits, supporting profitability during periods when term deposit rates are competitive. In FY25 disclosures, Ujjivan SFB had reported deposits of ₹37,630 crore with a CASA ratio of 25.5% at the end of the fiscal year. The FY26 CASA improvement, alongside higher deposits, indicates a better funding mix than the prior year’s base.

How FY25 profitability was affected by provisions

The FY26 operating metrics come after a period in FY25 where profitability was pressured by provisions. For the quarter ended March 2025, the bank reported a 75% year-on-year decline in net profit to ₹83.39 crore, hurt by higher provisions for bad loans. Net interest income was reported at ₹864 crore, down 7% year-on-year, while total income rose 4.4% to ₹1,843 crore. Total expenditure increased to ₹1,483 crore from ₹1,246 crore, and provisions and contingencies were ₹265 crore versus ₹79 crore a year earlier. For the full FY25, the bank reported net profit of ₹726 crore compared with ₹1,281.50 crore in the preceding fiscal year, with total income at ₹7,201 crore versus ₹6,464 crore in FY24.

Context from FY24: growth and healthier credit costs

The bank’s FY23-24 disclosures provide additional context for the longer trend. It reported FY23-24 disbursements of ₹23,389 crore and gross loan book of ₹29,780 crore, with deposits at ₹31,462 crore as of March 31, 2024. In that period, GNPA was reported at 2.1% and Net NPA at 0.3%, with credit cost at 0.58% and NIM at 9.1%. It also reported profitability of ₹1,281 crore for FY23-24. These data points help frame how FY25 saw higher credit costs and provisioning, and why the FY26 improvement in GNPA and CASA is being positioned as a major positive operational shift.

What broker commentary highlighted in May 2024

A separate Q4 FY24 result update dated May 22, 2024 maintained a ‘BUY’ recommendation with a target price of ₹64 and cited a current market price of ₹53 at the time, implying 21% potential upside. The note also stated an expectation that NIMs would be maintained at 9% in FY25E before moderating to around 8.8% in FY26E. Such broker projections are time-bound and depend on evolving funding costs, policy rates, and credit outcomes. Still, the inclusion of NIM expectations underscores why deposit mix, loan yields, and credit costs remain core variables for the stock.

Snapshot of disclosed metrics

Market impact and what to track next

For investors, the FY26 update shifts attention back to operating fundamentals: growth in deposits and advances, mix changes in disbursements, and the sharp year-on-year decline in GNPA. The earlier FY25 experience showed how higher provisions and funding costs can pressure profitability even when total income grows. As the bank’s secured product disbursement mix expands, future disclosures on margins, credit costs, and collection trends will be key to evaluating the durability of the asset-quality improvement. Separately, the FY25 filings also referenced an ARC transaction of ₹365 crore in February 2025 and a Universal Banking License application submitted in February 2025, alongside an amalgamation with Ujjivan Financial Services Limited. Those steps, if followed by further regulatory and operational updates, can remain in focus in subsequent quarters.

Conclusion

Ujjivan Small Finance Bank’s March 2026 update shows faster balance-sheet growth with deposits at ₹45,661 crore and a gross loan book of ₹40,655 crore, alongside improved GNPA and a higher CASA ratio. The Q4 FY26 disbursement surge in gold and vehicle loans adds detail on where growth is coming from. The next set of results and filings will matter for confirming whether the improved asset-quality and funding mix translate into more stable profitability.