The bank said its action plan aimed at improving asset quality has started showing results. Portfolio at risk (PAR) with loan recovery of Rs 725 crore declined from 30.8% in June to 21.7%. The PAR in July was 25.2%. According to a regulatory filing to stock exchanges, the lender’s collection capacity increased from 93% in July to 95% in August.
Chief executive Nitin Chugh had resigned on July 18 after the bank’s holding company, Ujjivan Financial Services, raised concerns over the quality of assets and alleged mishandling of human resources. The bank saw a series of exits from senior and middle-management level. In the past one year, several board members have also resigned before their stipulated tenure.
The gross non-performing asset ratio rose to 11.9% at the end of August, from 10.8% a month earlier.
The bank said that it is following a 100-day action plan for each business with a focus on PAR reduction and bad loan recovery with periodic monitoring and corrective action. The focus is on opening bucket and old accounts to reduce PAR and further strengthen the collection team and legal recovery for the small enterprise loan and affordable housing loan portfolio.
Its gross loan portfolio grew marginally to Rs 14,334 crore at the end of August, from Rs 14,137 crore a month ago. Gross debt stood at Rs 15,140 crore at the end of March. Unsecured microfinance loans contribute 67 per cent of its total portfolio.
The bank’s restructured portfolio increased to Rs 1,405 crore from Rs 769 crore at the end of June.