CARE Ratings has assigned a rating to Utkarsh Small Finance Bank (USFBL) based on its capitalization, profitability, and growth. The bank’s capital base is strong due to regular equity infusions, including its recent IPO of Rs 500 crore. Profitability is stable, with a Profit After Tax (PAT) of Rs 498 crore in FY24, resulting in a Return on Total Assets (ROTA) of 2.32%. However, the rating is constrained by the bank’s geographic and product concentration, with the top two states contributing 54% of advances and a high exposure to the microfinance sector. The bank has diversified its non-micro banking retail portfolio, and while deposit growth is steady, the current account savings account (CASA) ratio is relatively low at 19.01%. USFBL is a small finance bank that focuses on providing financial services to underserved and unserved sections, with a strong presence in rural and semi-urban areas. The bank’s Q1 FY25 results show a 27.81% jump in standalone net profit to Rs 137.39 crore, with total income increasing 31.78% to Rs 1,070.56 crore. The bank’s scrip ended at Rs 42.28 on the BSE during the last trading session.

Source: https://www.capitalmarket.com/markets/news/live-news/care-ratings-reaffirms-utkarsh-sfbs-lt-rating-at-a-with-stable-outlook/1555992