Suryoday Small Finance Bank (SSFB) reported a net loss of ₹48 crore in the first quarter ended June 30, 2021, on account of a write-off, provision on restructuring as well as the earnings impact on account of lower disbursements due to the second wave of Covid–19.

The bank had reported a net profit of ₹27 crore in the year-ago quarter.

Net interest income (difference between interest earned and interest expended) declined 8 per cent year-on-year (yoy) to ₹123.5 crore (₹134 crore in the year ago period).

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Other income, including processing fees, profit on sale of investment securities, income on dealing in priority sector lending certificate etc., was up 8 per cent yoy at ₹23 crore (₹21 crore).

Gross non-performing assets (GNPA) level nudged up to 9.52 per cent of gross advances as at June-end 2021 against 9.41 per cent as at March-end 2021. The bank said it has done a technical write-off of ₹78.5 crore during reporting quarter.

However, net NPAs declined to 4.47 per cent of net advances against 4.73 per cent due to increased provisioning.

Overall provisions soared 107 per cent yoy to ₹111 crore (₹54 crore). This includes a provision on restructuring of ₹27.8 crore.

Disbursement during the reporting quarter were down to ₹361 crore from ₹1,058 crore in the preceding quarter primarily due to effects of the second wave of Covid-19, the bank said in its presentation. It added that disbursements for July 2021 were ₹360 crore.

Gross advances increased 13 per cent yoy to stand at ₹4,004 crore as at June-end 2021 (₹3,534 crore as at June-end 2020).

Collection efficiency down

Collection efficiency (on one EMI basis) was down to 70.2 per cent for June from 86.8 per cent for March, SSFB said.

Overall collection efficiency in June 2021 was 89.3 per cent. Collection efficiency as on July 2021 (on one EMI basis) improved to 79.2 per cent and on overall basis was 107.4 per cent.

Baskar Babu, MD & CEO, said, “The bank during July 21 disbursed ₹360 crore, which is closer to the entire disbursements done for the Q1 FY22.

“The bank reported a collection efficiency (1-EMI adjusted) of 79 per cent and 107 per cent (overall), for the month of July-21, which was on an increasing trend from the previous month.”

Further, with easing of restrictions and pick-up in the business activity, Babu expects the numbers would improve substantially.