Utkarsh Small Finance Bank Ltd

Transformation driving business growth

It gives me immense pleasure to present you our maiden annual report after our successful listing on the stock exchanges following our Initial Public Offering (IPO) in July 2023. We launched our IPO to raise equity capital of Rs. 500 crore and it was oversubscribed by over 100 times, which remains a momentous achievement for all of us. I extend my heartfelt gratitude to all our investors for the trust they have placed in our vision and strategies. I am confident that we will continue to receive your support even in the years ahead.

We are now present across 26 states and Union Territories with 888 banking outlets, and are fast expanding our presence physically and digitally.

We have traversed a long and eventful journey of approximately 14 years from being a microfinance institution to a Small Finance Bank to a listed entity, with significant presence in rural and semi-urban locations and under-penetrated states of India. Focusing on financial inclusion, we offer a range of financial services that address the specific requirements of various customer segments.

We are now present across 26 states and Union Territories with 888 banking outlets, and are fast expanding our presence physically and digitally. We have a differentiated branch network to ensure relevant product offerings for customers and ensuring cost efficiency of operations.

If we look at the macroeconomic environment, global economic growth in FY23-24 has remained resilient with easing inflationary pressures and favourable employment conditions, despite geopolitical uncertainties and the risk of extreme weather conditions.

We registered strong business growth and profitability, demonstrating the continuous strengthening of our franchise.

Despite global headwinds, India continued to be one of the fastest growing major economies during the year. The country's economy is likely to emerge as the 3rd largest economy of the world by 2027-28 ; and I must mention that the banking sector as a whole, especially the small finance banks, will play a key role in this journey. This is because unless the last-mile citizens joins the economic mainstream, sustainable GDP growth is not possible.

Our performance during the fiscal has been robust. We registered strong business growth and profitability, demonstrating the continuous strengthening of our franchise. I am also pleased to share that we registered our highest-ever annual operating profit (pre-provisions) of Rs. 997 crores and a PAT of Rs. 498 crores for FY23-24.

The year also saw strategic investments in our infrastructure and human capital. We are growing our branch network to ensure more financial inclusion, especially in the rural and semi-urban areas. Our investments in the digital and business transformation initiatives to provide customers agile and hassle-free services have created a strong foundation for future growth. Our business model is sustainable, scalable and flexible to respond to the changes in the operating environment.

At Utkarsh, we prioritise strong corporate governance. Our framework is built on a foundation of ethical practices, targeted policies, and a Board of Directors whose diverse expertise guides the Bank's long-term success. We hold ourselves to the highest standards of transparency and accountability, adhering to best practices and continuously benchmarking our performance. This commitment extends to shareholder value creation, achieved through open communication and responsible stewardship.

Beyond immediate business priorities, we are also taking concrete steps to reduce our environmental footprint. From energy-saving initiatives to promoting solar lighting and tree plantation drives, we are working towards a sustainable future for all. We also understand the critical importance of water conservation, and we are implementing adequate measures to conserve this precious resource.

We prioritise supporting educational advancement and empower individuals with financial literacy tools. Responsible lending practices are critical for us, and we focus on supporting key sectors that drive economic growth.

At Utkarsh, we are champions of women's empowerment. We provide income generation loans, specifically designed to foster financial independence and economic participation for women.

In conclusion, I would like to express my gratitude to our dedicated team, valued customers, investors, regulator and other stakeholders for their continued trust and support.

Warm regards,