Utkarsh Small Finance Bank reported mixed performance in its loan portfolio for the quarter ended December 31, 2025. The bank's gross loan portfolio stood at ₹18,306 crore, representing a year-on-year decline of 4% from ₹19,057 crore in the corresponding period last year. On a sequential basis, the portfolio declined 1.9% from ₹18,655 crore recorded in September 2025. The figures include inter-bank participation certificates issued by the bank, as reported in the bank's business update.
The bank witnessed contrasting trends across loan segments during Q3 FY26. The joint liability group (JLG) loan portfolio declined significantly by 34.1% year-on-year to ₹6,419 crore from ₹9,737 crore in the previous year and was down 15.7% sequentially from ₹7,613 crore. However, this decline was partially offset by strong growth in the non-JLG loan portfolio, which increased 27.6% year-on-year to ₹11,888 crore from ₹9,320 crore and rose 7.7% on a quarter-on-quarter basis from ₹11,042 crore, according to the bank's quarterly business update.
Utkarsh Small Finance Bank demonstrated resilience in deposit mobilization with total deposits increasing 4.5% year-on-year to ₹21,087 crore from ₹20,172 crore as of December 31, 2025, though they declined 1.7% sequentially from ₹21,447 crore. CASA deposits rose 16.1% year-on-year to ₹4,611 crore and increased 2.9% quarter-on-quarter. The CASA ratio improved to 21.9% compared with 19.7% a year earlier and 20.9% in the previous quarter, as reported in the bank's business update.
The bank's funding profile showed improved stability with retail term deposits growing 23.8% year-on-year to ₹12,586 crore and up 2.7% sequentially. In contrast, bulk term deposits declined 35.6% year-on-year to ₹3,890 crore and fell 17.4% quarter-on-quarter. The CASA plus retail term deposits ratio stood at 81.6% on December 31, 2025, compared with 70.1% a year earlier and 78.1% in the previous quarter, indicating a shift towards more stable funding sources.
The bank maintained strong operational efficiency with X bucket collection efficiency improving to 99.1% from 98.6% sequentially for its micro banking loan portfolio during the quarter, excluding pre-payments. For Utkarsh and other microfinance lenders, the X bucket refers to highly delinquent category of loans, usually significantly overdue such as 90-days-plus or 120-days-past due, representing the riskiest part of their loan book. The liquidity coverage ratio stood at 200% as of December 31, 2025, well above regulatory requirements. Shares of Utkarsh Small Finance Bank ended at ₹15.11, down 1.4% on January 6, 2026. The stock has declined 45.9% over the past year and is trading 48.4% below its 52-week high of ₹29.33 per share.
