Shares of Ujjivan Small Finance Bank rose 3.19% to ₹34.61 on the NSE as of 9:44 am today, following the board’s decision to sell its non-performing assets (NPAs) and written-off loans worth ₹270.35 crore to an asset reconstruction company (ARC). The transaction, conducted through the Swiss Challenge Method, fetched a consideration of ₹40.55 crore.
The Swiss Challenge Method is a bidding process allowing private players to acquire contracts, and this move marks the bank’s effort to clean up its balance sheet amidst ongoing stress in the microfinance sector.
In the September quarter, Ujjivan SFB reported mixed results. While net interest income (NII) grew 9.5% year-on-year, net profit fell 23% YoY. The bank maintained stable asset quality, with gross NPAs at 2.5% and net NPAs at 0.6%. However, the management revised key guidance metrics downward, including loan book growth, NIM (to ~8.6%), and RoE, citing uncertainties in the microfinance segment.
Despite today’s uptick, shares of Ujjivan SFB have fallen over 41% year-to-date, significantly lagging behind the Nifty 50’s 10% gain.
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