Total income tanked 18.39% YoY to Rs 952.07 crore in the quarter ended 31 March 2026.
The company reported pre-tax loss for Q4 FY26 stood at Rs 232.08 crore, as against Rs profit before tax was at Rs 11.27 crore reported in the corresponding period of previous year.
In Q4 FY26, Net interest income stood at Rs 376 crore, down 9% as against Rs 411 crore posted in Q4 FY25. Net interest margin (NIM) reduced to 5.5% in the March 2026 quarter as compared to 6.4% recorded in Q4 FY24.
Total deposits stood at Rs 21,654 crore in Q4 FY26 as against Rs 21,566 crore in Q4 FY25.
CASA deposits rose to Rs 5,196 crore in Q4 FY26 as against Rs 4,699 crore a year ago, reflecting improvement in low-cost deposit mobilisation.
Retail term deposits increased to Rs 12,720 crore in Q4 FY26 as against Rs 10,635 crore in the year-ago period, indicating continued traction in granular deposits.
Bulk term deposits declined 40% to Rs 3,738 crore in Q4 FY26 as against Rs 6,232 crore in Q4 FY25.
CASA ratio improved to 24% in Q4 FY26 as against 21.8% in Q4 FY25.
CASA plus retail term deposits ratio rose to 82.7% in Q4 FY26 as against 71.1% in the corresponding quarter last year.
Credit cost declined to Rs 223 crore in Q4 FY26 as against Rs 462 crore in Q4 FY25.
Provision Coverage Ratio (PCR) stood at 51.2% in Q4 FY26 as against 62.7% in the corresponding quarter last year.
Govind Singh, MD & CEO of Utkarsh Small Finance Bank, said Q4 FY26 marked a 'decisive quarter of strategic recalibration' for the bank, driven by a focus on portfolio quality, secured asset expansion and operational strengthening amid continued stress in the microfinance segment.
He said the bank prioritised 'stability over speed' during the quarter by tightening underwriting standards, strengthening collections and rebalancing the portfolio mix toward lower-risk segments.
According to Singh, disbursements improved across both Joint Liability Group (JLG) and non-JLG portfolios, while JLG X-bucket collection efficiency rose to 99.7% in March 2026, the highest level recorded during FY26.
Fresh NPA slippages, net of recoveries and upgrades, declined sharply to around Rs 170 crore in Q4 FY26 from nearly Rs 710 crore in Q4 FY25, while the gross non-performing asset (GNPA) ratio improved around 330 basis points sequentially to 7.7% as of March 2026.
Singh said the bank continued to reduce unsecured exposure and increase focus on secured, higher-yield and lower-risk businesses. Non-JLG portfolios, including micro banking and business loans (MBBL), MSME, housing and BBG segments, witnessed strong momentum, with the MBBL portfolio growing 122% year-on-year.
On the liabilities side, the bank strengthened its deposit franchise, with CASA plus retail term deposit ratio improving to 83% from 71% a year earlier. Cost of funds also declined by over 45 basis points year-on-year in Q4 FY26 as the impact of repricing flowed through.
He added that the bank had registered with CGFMU for credit-guarantee coverage on eligible JLG and MBBL disbursements to further reduce incremental risk exposure.
Singh said investments under the 'Utkarsh 2.0' transformation programme enabled automation, digital underwriting and enhanced monitoring capabilities, improving productivity and risk controls.
The bank's capital position remained comfortable following the successful Rs 950 crore rights issue completed in November 2025, which strengthened Tier-I capital, he added.
Going forward, the bank will remain focused on improving collections, calibrated disbursement growth in higher-quality segments, expanding secured lending and accelerating liability mobilisation to support prudent long-term growth, Singh said.
Utkarsh Small Finance Bank (USFBL), incorporated on April 30, 2016, is engaged in providing banking and financial services with a focus on providing financial services to the underserved and unserved sections.
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