Utkarsh Small Finance Bank reported a strong increase in business activity during the September quarter, with total disbursements rising nearly 55% year-on-year, even as the lender continued to shift its portfolio towards non-Joint Liability Group (JLG) loans.
Total disbursements stood at Rs 3,525 crore in Q2 FY27, up 54.9% from Rs 2,275 crore a year earlier, according to the bank's provisional business update filed with the exchanges on October 6.
The growth was largely driven by non-JLG disbursements, which almost doubled to Rs 2,602 crore from Rs 1,340 crore in the year-ago quarter, marking a 94.2% increase. On a sequential basis, non-JLG disbursements rose 19.4% from Rs 2,180 crore in Q1 FY27.
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JLG disbursements, however, remained broadly flat on a yearly basis at Rs 923 crore, compared with Rs 935 crore in Q2 FY26. They declined 22.4% sequentially from Rs 1,190 crore.
The shift towards non-JLG lending was also visible in Utkarsh SFB's loan portfolio. Gross loan portfolio increased 7.5% year-on-year to Rs 20,063 crore from Rs 18,655 crore, and was up 2.3% from Rs 19,610 crore in the previous quarter.
Within this, the non-JLG loan portfolio expanded 35.1% annually to Rs 14,917 crore. In contrast, the JLG portfolio declined 32.4% to Rs 5,146 crore.
As a result, the JLG-to-non-JLG portfolio mix moved to 26:74 in Q2 FY27, compared with 41:59 a year earlier.
Utkarsh SFB's deposits also grew during the quarter, though at a slower pace than its loan disbursements.
Total deposits rose 6.6% year-on-year to Rs 23,869 crore from Rs 22,385 crore. Sequentially, deposits increased 3.3%.
Within the deposit base, CASA deposits grew 14.3% year-on-year to Rs 5,121 crore, significantly outpacing overall deposit growth. CASA deposits were also up 5.2% from Rs 4,867 crore in Q1 FY27.
The bank's CASA ratio improved to 21.5% in Q2 FY27 from 20% a year earlier, although it was slightly below 21.1% in the previous quarter.
Retail term deposits increased 11.8% annually to Rs 14,442 crore, while bulk term deposits fell 13.5% to Rs 4,307 crore.
Utkarsh SFB's secured loan share also increased, with the secured-to-unsecured portfolio mix improving to 52:48 from 47:53 a year ago.
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The bank reported collection efficiency for its X bucket at 99.53%, while the SMA pool stood at 1.48%, down sharply from 4.87% in Q2 FY26.
Its liquidity coverage ratio stood at 176% as of September 30, 2026.
Utkarsh SFB cautioned that the Q2 FY27 numbers are provisional and subject to review by its statutory auditors and approval by the Audit Committee and Board.
Shares of Utkarsh Small Finance Bank closed at Rs 13.52 on October 6, up 2.27%.
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