Unity Small Finance Bank Limited, a pioneering digital-first bank, reported impressive financial results for the third quarter and nine months ending December 31, 2023. In Q3FY24, pre-provisioning operating profit (PPoP) soared by 180 per cent quarter-on-quarter (QoQ) to ₹133 crores, while net interest income surged by 71 per cent QoQ to ₹257 crores, achieving a net interest margin of 10.9 per cent on net advances.
The net profit exhibited remarkable growth, recording a 79 per cent increase at ₹110 crores Q-o-Q and reaching ₹296 crores for the 9M’FY24 period, marking a substantial 240 per cent year-on-year (YoY) growth. The bank’s overall deposits crossed ₹5,000 crores, showcasing a significant 163 per cent YoY increase, and net advances stood at ₹6,601 crores, reflecting an impressive 80 per cent YoY growth.
Asset quality parameters witnessed improvement, with non-net-performing assets (NNPA) at 0.9 per cent and a provision coverage ratio (PCR) at 98.4 per cent, including technical write-offs. The bank maintained adequate growth capital, boasting a capital-to-risk-weighted assets ratio (CRAR) of 33 per cent, well above regulatory requirements. Shareholders’ funds increased to ₹1,831 crores as of December 31, 2023.
In terms of efficiency, Unity Bank achieved a return on assets (ROA) of 3.8 per cent and a return on equity (ROE) of 31.1 per cent (annualised) for Q3 FY24. The total income per employee ratio stood at 30 per cent, and the net profit per employee ratio reached 8 per cent for 9MFY24 (annualised), indicating strong operational efficiency.
Unity Bank expanded its geographic presence, integrating the erstwhile PMC Bank and efficiently operating across 441 locations in 17 states, with plans to further expand into Andhra Pradesh, Telangana, and Tamil Nadu. The bank maintained a strong focus on corporate governance, appointing Dr. Pronab Sen as its Chairman, bringing valuable experience in statistics, finance, and economics.
Looking ahead, Unity Bank is committed to increasing investments in technology, rolling out digital offerings, and strategically expanding its branch network. The bank aims to introduce new products such as credit cards and personal loans, leveraging its digital banking business and significant marketing efforts to enhance reach and customer acquisition across various segments.
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