Qualitative Analysis

• Ujjivan Financial Services Limited started operations as an NBFC in 2005 with the mission of providing a full range of
financial services to the economically active poor who are not adequately served by financial institutions.

• It is one of the largest MFI in the country in terms of geographical spread having their operations spread across 24 states
and union territories, and 209 districts across India.

• Ujjivan's erstwhile business was primarily based on the joint liability group lending model for providing collateral free,
small ticket-size loans to economically active poor women.

• Ujjivan Small Finance Bank Limited is a wholly owned subsidiary of Ujjivan Financial Services Ltd. It commenced its
banking operations in February 2017 when it transitioned from a NBFC-MFI to a Small Finance Bank. It attained a
Scheduled Bank status in August 2017.

• It serves over 37.13 lakh active customers through 469 branches and 10,881 employees spread across 209 districts and 24
states in India. Its Gross Loan Book stands at ₹7,095.28 crore. It has over 121 full-service banking branches with a
deposit base of ₹2,437 crore as of December 31, 2017

• In 2017-18 it had a total income of Rs 1,581.7 crores, an increase of 13.2% over the previous year.

• The ROA and ROE stood at 0.1% and 0.4% as against 2.9% and 14.1% in the previous year largely a reflection of the
significant credit costs due to demonetization and transition costs incurred during the year.

• Ranked 3rd in India’s Best Companies to Work For & ranked 10th in Asia’s Best Large Workplaces List.

• CAR and CAGR of 23.04% and 45% respectively according to annual financial report 2017-18
 Product Offerings
Asset Offerings Third Party Product Offerings
 SWOT Analysis
•Structural benefits of operating as a small finance bank
•Established presence in the microfinance business
•Adequate capital position supported by sizable networth
•Sound risk management systems and processes
•Extensive experience of board and senior management team
Strength •Structurally strong liquidity profile
•'CRISIL A1+' rating on the certificate of deposits programme and short-term fixed deposit programme of Ujjivan

•Weak in urban market as compared to other private and public banks

•Slow growth in retail deposits
•Modest credit risk profile of borrowers and low seasoning in non-microfinance portfolio
Weakness •Maintaining profitability in the initial years as a SFB amidst asset quality challenges

•Small Business Owners in the unorganized segment, aspiring for an own house
•Salaried class in blue collar jobs looking for Purchase/Construction of houses.
•New opportunities in credit card, home equity and distribution of mutual funds
Opportunities •Tie-up with global financial giants to growth faster

•Expansion of foreign banks poses severe competition

•Mergers and Acquisition by existing banks
Threats
 Performance Highlights
Particulars 2016 2017 2018
Gross Loan Book 3428Cr 6379.49Cr 7787Cr

States/UTs 24 24 24
Branches 423 457 462
Active customers 30.5Lakh 35.67Lakh 36.9Lakh

Employees 8,049 10,167 12,295

GNPA 0.15% 0.28% 2.7%
NNPA 0.03% 0.03% 0.3%
Customer 86.3% 86.40% 87.5%
Retention Ratio

ROE 18.32% 14.07%

ROA 3.65% 2.92%
CAR 24.1 18.24% 23.8%
Deposits 3803Cr
 Process Improvements & Digitization
• ‘Insta-kits’ and ‘Insta debit cards’ live across all branches

• GLOW had led to improvement in TAT significantly to around 3-4 days and reduction in data entry costs.
92% of the loan disbursements in Q1 FY19 happened through GLOW mechanism

• Digi-buddy program - to deepen digital banking penetration. On an average, Digi-buddy branches reported
double the number of card transactions than in a non-Digi-buddy branch

• Tie-up with Paytm and Instamojo to drive cashless repayments. Payment methods include wallet, internet
banking and debit card, one Standee in every Branch for QR code payments.

• ATM: Network of 232 biometric ATMs

• 8,000+ handheld devices for account opening

• 93% of FD and RD accounts were sourced through hand held device, mobile and internet banking
 Capital Ratios
Desc. 2017-18 2016-17 2015-16
Tier 1 Capital (in lacs) 148295 157054 116276.2
Required Tier 1 capital 7.50% 7.50% 7.50%
Tier 2 capital (in lacs) 4813 13128 9183
Required Tier 1 capital 7.50% 7.50% 7.50%
RWA 848844.0 16570.2 519700.1
Capital Adequacy ratio 23.04% 113.76% 24.14%
Required CAR (as per BASEL II) 15% 15% 15%

• CAR meets BASEL II norms and is capable of meeting BASEL III norms
• Higher CAR signifies that bank can safely meet its financial obligation
 Capital Ratios (continued)
Desc. 2017-18 2016-17 2015-16
Debt (in lacs) 762532 649782 452955.9
Equity (in lacs) 164693 164007 119775.7
Debt to Equity 4.6300 3.9619 3.7817
Advance (in lacs) 733546 586105 18538.5
Assets (in lacs) 153108 170182 125459.2
Advance/Assets 4.7910 3.4439 0.1477

• Increasing Debt to equity ratio signifies that bank has been aggressive over
the years
• Increasing advance to assets ratio is an indicator of risk appetite of bank and
may result into better profitability
 Asset Quality
Desc. 2017-18 2016-17 2015-16
Net NPA (in lacs) 5093.0 179.71 203.6
Gross NPA (in lacs) 27592 587564 778.7
Gross NPA to Gross Advances 3.65% 0.28% 0.15%
Net NPA to Net Advances 0.69% 0.03% 0.04%

• Gross NPA and Net NPA effects the profitability and the liquidity of banks
• Net NPA has increased significantly from 2016 to 2018 which is not a sign
for the bank
• Increasing GNPA to Gross advances and NNPA to Net Advances is an
indicator of poor quality of bank loans and risk management of bank
 Management Efficiency

Desc 2017-18 2016-17 2015-16

Investments Turnover Ratio 93.40% 92.79% 0.002%
Loan to Deposits Ratio 481.27% 5507.41% 51146.98%
Business per Employee(Lakhs) 9.1408 0.2332 0.0962
Profit per Employee (Lakhs) 0.0037 2.0423 2.2018

• The Investments Turnover Ratio has Increased drastically as Ujjivan converted from NBFC to Small Finance bank
This signifies that the Investments have increased drastically as the company got converted to the small finance bank
• The Loan to Deposits ratio has significantly decreased over time after the conversion as the number of deposits have
increased after conversion from NBFC to Bank
• Business per Employee has increased after the conversion signifying increase in Revenue
• Profit per Employee has gone down after the conversion which signifies increase in operating costs
 Earnings

Desc 2017-18 2016-17 2015-16

Return on Net Worth(%) 0.02% 11.82% 14.79%

Gross operating Profit/ Working Fund 2.63% 19.04% 44.13%

Return on Assets 0.02% 11.75% 3.09%

• Decreasing Earnings Ratios clearly signify the decreasing trend in the Net Income after the Conversion form NBFC
to small Finance Bank
 Liquidity Quality
Desc. 2017-18 2016-17 2015-16
Govt. Securities (in Lacs) 123237 144657 0
Govt securities/ Total Investment 99.99% 99.99% 0.00%
Govt Sec/ Total Assets 12.56% 17.06% 0.00%
Liquid Assets 80641 95466.6 49126.5
Liquid assets / total assets 8.22% 11.26% 12.35%
Liq assets/ total deposits 50.22% 462.51% 4961.42%
Cash / Deposits 36.97% 368.24% 2635.19%

• Sudden investment in Government securities as Ujjivan got transformed

from a NBFC to Bank
• Bank has decreased its liquid assets significantly over the span of three
years
• Decreasing ratios indicate more and more core funds are used for lending
 COMPETITOR ANALYSIS

Ujjivan AU Janalakshmi
Total Income 216.81 1387 2978
PAT 207.64 822 170
Net Worth 1,755 1988 2397
Return on Assets 11.75% 69.71 1.20%

Return on Equity(Net
worth) 11.82% 41.48% 9.40%
Gross NPA 0.28% 1.90% 0.70%
Net NPA 0.03% 0.10% 0.50%
CAR 113.76% 23% 23.90%
 ANALYSIS

• Return on Assets (ROA) is an indicator of how profitable a

company is relative to its total assets. ROA gives an idea as to
how efficient management is at using its assets to generate
earnings.
• Return on equity measures a corporation's profitability by
revealing how much profit a company generates with the money
shareholders have invested.
• Capital adequacy ratio measures bank’s capital with respect to
its risk weighted assets.
GNPA VS NNPA