Ujjivan Small Finance Bank Limited (NSE: UJJIVANSFB) Q3 2026 Earnings Call dated Jan. 22, 2026
Corporate Participants:
Unidentified Speaker
operator
Sanjeev Nautiyal — Managing Director & Chief Executive Officer
Sadananda Balakrishna Kamath — CFO
Gaurav Sah — Investor Relations
Umesh Arora — Head of Emerging Business
Brajesh Joseph Cherian — Chief Risk Officer
Analysts:
Ajit Kumar — Analyst
Rajiv Mehta — Analyst
Suraj Das — Analyst
Shreepal Doshi — Analyst
Ashlesh Sonje — Analyst
Deepak Poddar — Analyst
Sucrit Patil — Analyst
Hitaindra Pradhan — Analyst
Chintan Shah — Analyst
Pritesh Bumb — Analyst
Sagar Shah — Analyst
Khushwant Pahwa — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Q3 FY26 Ujjivan Small Finance Bank Analyst Conference Call hosted by JM Financial Institutional securities Limited. As a reminder, all participant lines will be in the listen only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Ajit Kumar from JM Financial Institutional securities. Thank you. And over to you, sir.
Ajit Kumar — Analyst
Thank you. Good evening everyone. I welcome you all to Q3FY26 earnings call of a Jeevan Small Finance Bank. Today we have the senior management team of Jeevan Small Finance bank Represented by Mr. Sanjeev MDA and CEO Carol Futado. Executive Director. Mr. Sadhanand Balakrishnan Kamath, CFO Mr. Ashish Goel, Chief Credit Officer. Mr. Vivas Chandra, Head Micro Banking. Mr. Hitendra Jha, Head Retail Liability Staff and TPP. Mr. Umesh Arula, Emerging Business. Mr. Martin, PS Chief Operating Officer. Mr. Brajesh Cheeriel, Chief Risk Officer. Mr. Siddharth, Federal Investor Relations and Mr. Gaurav Shah, Lead Investor Relationship. I would like to thank the management for giving us this opportunity to host this call.
I would like to hand over the call to Mr. Sanjeev Nautian for his opening remark. Over to you, sir.
Sanjeev Nautiyal — Managing Director & Chief Executive Officer
Good evening everyone. And thank you for joining us today for Ujjeevan’s Q3 and nine month financial year 26 earnings call. On behalf of the entire Ujeevan team, I would like to extend our warm wishes for the new year. Please note, references will be made to Q3 26 versus Q3 25 as YOY and Q3 26 versus Q2 26 as QoQ. The operating environment remains favorable as reflected in real GDP.
operator
I’m sorry to interrupt, sir. Could you please come a little closer to the microphone? Your voice is just a bit muffled.
Sanjeev Nautiyal — Managing Director & Chief Executive Officer
The operating environment remains favorable as. Is this better, please?
operator
Yes, sir. Slightly better. Please. Go ahead.
Sanjeev Nautiyal — Managing Director & Chief Executive Officer
Okay. The operating environment remains favorable as reflected in real GDP growth print of 8.2% in quarter two of financial year 26. This marks the fastest pace of expansion over last 18 months. With financial year 26 growth expectation at 7.3%. This underscores the continued strength in domestic demand alongside improving industrial and manufacturing capacity utilization supported by healthier corporate revenues. For the banking sector. These strong macro fundamentals translate into supportive backdrop for sustained demand for credit as well as improving asset quality.
The RBI MPC rate reduction of 25 basis points in December lends further impetus to future growth prospects. We look forward to the Union budget to continue the path of fiscal consolidation while boosting key pillars of GDP growth. Coming to our quarterly performance, we have delivered yet another stellar quarter on the overall business deposits grew by a strong 7.7% QoQ and 22.4% YoY to rupees 42,223 crores with our credit to deposit ratio staying comfortable at 88%. CASA mobilization has been healthy and remains a key focus area for us. In line with our guidance, we continue to expand our geographic footprint footprint during the quarter with the addition of 11 branches taking our total branch network to 777.
This marks completion of planned addition of 24 branches for financial year 26. The clear focus on acquiring quality new to bank customers and dedicated channels to engage better with existing to bank customers has led to CASA percentage staying above 27% for two consecutive quarters. We have witnessed improvements both on month end balances and monthly average balances. With the planned enhanced engagements with Katha customers, we are poised to better this ratio. Cost of funds continue to trend lower due to the deposit rate cuts already taken in H1FY26 and better overall liquidity planning. Cost of funds for the quarter was 7.08% down 26bps QoQ.
We are closely monitoring the tight liquidity scenario and remain comfortably placed with LCR at 165.6% as of December 25th effective January 9th. Savings account deposit rates in the lowest two brackets have been reduced by 25 basis points and 50 basis points reduced respectively. Gross loan book GLB for the quarter grew by 7.1% QoQ and 21.6% YUI to 37,057 crore rupees driven by the highest ever quarterly disbursements at rupees 8,293 crores. This was due to all round performance across unsecured and secured products. Our micro banking portfolio continued to demonstrate strong momentum across collections and disbursement growth.
Bucket X collection efficiency showed continued improvement for seven consecutive months starting June 2025 and clocked 99.7% for December 25th. The book created with enhanced credit policies within MF and guardrails is leading to these improved collections. The rejections trend has started to move lower and we expect further improvement in new customer acquisition going ahead. New Customer additions were at 1.4 lakhs up 11%. QoQ disbursements in micro banking were at Rupees 4,688 crores up 10% QoQ and 62.4 percentages. Yui led by improving market sentiments Group loans GLB grew 0.2% yoyo after a five quarter contraction. GL continued to witness increase in ticket sizes in line with larger market trend.
Individual loans disbursement continued to grow steadily on back of graduating customers from GN. GLB came in at rupees 5687 crore growing 4.1 percentages QoQ and 14.8 percentages YUI coming to our secured portfolio Growth in the secured book continues to stay aligned with our long term objective of increasing its share in the overall loan book now reaching 48 percentages. Housing portfolio comprising of affordable housing and micro mortgages delivered strong growth of 49.6% YoY. Affordable GLB housing GLB grew by a healthy 40.3% YoYo to Rupees 8231 crores. This was supplemented by micro mortgage book which more than doubled to rupees 1,329 crore.
Yui Asset Quality Trends continue to be along expected lines with PAR improving sequentially to 3.3 percentages and GNPA remaining flat at 1.1 percentages. Housing Loan Portfolio represents a mature business that that we have built steadily over the last nine plus years. This book represents an important growth engine for the bank. Our focus has been on scaling this franchise in a calibrated and sustainable manner leveraging our distribution strengths. MSME GLB witnessed a robust growth of 69.1% YoY at Rupees 2,865 crore driven by disbursement growth of 37.4% YoY and to Rupees 457 crores. Asset quality continued to improve with GNPA as of December 25 at 4.1 percentages with new books showing negligible delinquency.
As the working capital business grows, the liabilities cross sell continues to expand. The relatively new gold loans business has scaled up roughly fivefold yoy to Rs. 557 crores. Disbursement capacity continues to expand the with the product now being offered in 349 branches leading to 100 crore rupees disbursement month on month with book LTV below 60% as of December 25. Portfolio is resilient to any abrupt shocks arising from underlying gold price movement. AGRI loans now constitute 3.4% of the overall secured portfolio. The GLB has scaled sharply by 212 percentages yu yes to rupees 607 crores supported by strong disbursement of rupees 125 crore in Q3 vehicle loans.
The steadily increasing new two wheeler book is high yielding at around 20%. Growth in the vehicle finance portfolio was driven on the back of the festivities in Q3 witnessing a robust growth of 120% YUI reaching Rupees 823 crore with GNPA at 1.8 percentages. Fi G book has grown 6.9% QoQ and 17.9% YUI and continues to create opportunities for the bank across both assets and liability products. We will introduce our mid corporate offerings in Q4 26 which will expand the product suite. AD1 business has commenced in November 26th. At present we offer FCNR, EEFC and account payments for our customers.
We are in the process of starting our trade build out to handle FX bills, LC’s and BGS coming to bank level. Asset quality par for the bank came below 4%. This was 5.36 percentages as of December 24th. SMA Book continued the positive momentum and came in at 1.6 percentages as anticipated. Slippages and write offs have moderated to rupees 221 crore and rupees 126 crore respectively. In Q3 GNPA came in at 2.4 percentages as of December 25. Credit cost for the quarter including rupees 9 crore of accelerated provision came in at rupees 195 crore. VCR moved up to 76% up 3% QoQ reflecting positive signs in provision requirement in Q3 which is expected to see further reduction in Q4.
This is along guided lines on the margin side. Net interest margin for the quarter was sequentially higher at 8.2 percentages supported by lower cost of funds, favorable product mix, lower interest receivable and unsecured portfolio coupled with CRR relaxation. Our reported net interest income of Rupees 1000 crore is a growth of 12.8% YoY and 8.5% QoQ. This marks the highest ever reported NII reflecting our growth as well as normalization in P and L post the recent stress period as regards the implementation of New labor code effective November 25th we have assessed and accounted for the estimated incremental impact towards past service cost amounting to pre tax rupees 18 crores.
Our cost to income ratio came in flat QoQ at 66 percentages. Adjusted for this rupees 18 crore one off impact, our cost of income drops below 65 percentages. Profit after tax came in at rupees 186 crore with a ROA of 1.5% and ROE of 11.5% indicating strong improvement in profitability. The improved profitability is on expected lines and is built into FY26 guidance range on our universal bank application being considered by the regulator. We continue to remain hopeful to bolster the board. We welcome Mr. Anirudh Paul to the Jeevan family. He has been appointed as an Independent Director effective today subject to the approval of the shareholders.
He is an award winning business and technology leader with over three decades of global experience across banking, insurance, technology and digital transformation. He brings expertise in complex transformation, innovation in AI and data process and technology that will help the bank in its growth trajectory. As I conclude, I want to reiterate that the broad based improvements delivered in quarter three across key operating metrics are durable and reflective of disciplined execution, keeping in sight our long term vision while we grow our various businesses. We are managing our expenses in a very tight band and we should see our investments in distribution, process, technology, digital and marketing creating an operating leverage over the medium term.
As we close in on the end of the financial year, our teams are working on the annual operating plan for financial year 27. We shall continue to generate growth momentum across deposit and asset products into the new financial year. Asset book diversification shall continue while improving asset quality. Cost of funds is expected to trend better leading to improved performance across parameters. I will pause here and open the floor for questions. We have our ED CFO and other colleagues who will collectively answer the audience’s questions. I now hand over to Alaric. Thank you so much.
Questions and Answers:
operator
Thank you sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press Star and two participants are requested to use handsets while asking a question and kindly restrict yourselves to two questions. For any more you may rejoin the queue. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Rajiv Mehta from yes, securities. Please go ahead.
Rajiv Mehta
Yeah, hi. Good evening.
Congratulations on very strong performance. Sir, my first question is on the status of universal banking license. While you remain hopeful about it but has there been any, any, any communication or any kind of, you know, Pushback as per in the recent time and which implies that the approval is. Will come with some delay or which explains why it is taking so much time because it will be about 12 months since we applied. So if, if there is anything like that or you think that it’s a normal time and we are absolutely very near the point where the application will get a decisive, you know, decision from rbi.
Sanjeev Nautiyal
…
So Rajiv, it is being actively considered by the Reserve bank of India and we have to just wait for their decision. I mean that’s all I can say. We would expect it to happen as quickly as possible. The decision that is…
Rajiv Mehta
O kay. And sir, now just commenting, if you can comment on the NIMS trajectory because NIM has pleasantly gone up by 30 basis points equation in this quarter. Now incrementally when I look at your cost of term deposits it was just the first quarter wherein we have started the fall, you know, happening by 40 basis point.
Now if you can explain the trajectory of how your cost of term deposits can further fall in up to what level and you also cut some sage. So how would that also have some, you know, positive impact on the cost of fund. And now with the growth mix, you know, slightly getting better with MFI coming back, how do you see the yield playing out and consequently, you know, at the dynamics of both asset and liability pricing, how do you look at your NIMS over the next two, three quarters?
Sanjeev Nautiyal
Hi Rajiv. So Rajiv, we expect the NIM to at least stay at the same level as we have reported in this quarter.
Possibilities for improvement do exist and the kind of initiatives that we have taken on the reduction of the rates of interest, savings bank deposit rates in the lower to lowest two buckets by 25 basis points and 50 basis points and the tightening of the costs and the expenses and the kind of portfolio held that we are witnessing on the micro finance side and the growth that it is exhibiting all points into a positive direction. So let the actual action happen in the last quarter. We remain positive.
Rajiv Mehta
Okay, so just two last things. Where do you want to maintain your.
operator
I would request you to rejoin the queue as you’re done with two questions.
Rajiv Mehta
So. No problem.
operator
Thank you. The next question comes from the line of Suraj Das from Sundaram Mutual Funds. Please go ahead.
Suraj Das
Hi sir. Am I audible?
operator
Yes Suraj, please go ahead.
Suraj Das
Yeah, thanks for the opportunity. 2 Question 1 On the yield on MFI this quarter the yield on MFI has gone up on a Q or Q basis. Just wanted to check, check if this is a function of the lower slippages or you have taken any rate hike or done some sort of that thing there.
That is question one. Second question sir, in terms of this individual bar zero number on the West Bengal side, I think this number has been quite sticky for last two, three quarters. When do you see improvement there? And the last question would be sir, on the affordable housing book, I think in terms of PCR on the housing portfolio has come down quite a bit. I mean over the last three, four quarters it used to be 60% plus 60, 65%. However I think that number right now is mid-40s. So what would be your comfortable level of PCR in the housing portfolio? As this is the one of the fastest growing portfolio within the bank.
Unidentified Speaker
Suraj ON the first question which was 22.2 yield, the bank has not taken any changes in the rate, you know the lending rates. It is only on account of reduced lippages and therefore consequently reduced interest reversals. The second question was related to individual loans with West Bengal we had pointed out last time was showing a higher power. So when you look at the SMA book, the SMA book has started to come down our bucket. Tax collection efficiency in West Bengal has also improved. So SMA has come down. However, 90Plus continues to be slightly on the higher side.
And on housing we on housing The PCR is 55%. I don’t think it is lower than that. Yeah it is. So last time also we had said that on almost all secured assets our PCR is about 55% and on unsecured our PCR is in the range of 85% bringing the overall PCR to 75, 76%. That continues even in the end of this quarter.
Suraj Das
Sure, understood. Thanks for that. Probably the housing will take it offline.
operator
Thank you. The next question comes from the line of Sripal Doshi from Equilious Capital. Please go ahead.
Shreepal Doshi
Hi sir, thank you for giving me the opportunity and congrats on a good quarter.
So my question was on MFRI segment, so what is a customer base there as on December and how has been the customer addition in the last couple of quarters? Just wanted to understand that. And then to follow up there, what is the kind of rejection rate that we have seen in this segment for the new customers given the kind of guardrails that are prevalent for MFI lenders. So that is question number one and question number two was on the OPEX front so that run rate continues to be elevated. So while we’ve been adding branches there and also for I think the new product, the infrastructure but but will the run rate come down or will it remain elevated despite the CA ratio looking better.
Unidentified Speaker
Answering to your first question NCA is something which a question in the industry in the last one year after the crisis. How NDA moves will also decide that how your board base overall borrow based increase in industry this year has been good for us. We started this year in the first quarter with close to 1.08 lakh customer. New customer acquisition. Q2 was close to 1.24 and Q3 is at about 1.4. So there has been consistent improvement every quarter in terms of new customer acquisition. And we see that in next quarter also we’ll see improvement in new customer acquisition.
The reason behind that is that you know if you look at you also asked about rejection rates and rejection rate. Obviously after implementation of Guarded 2.0 it went up and it went up to 46 47%. And if you look at our number now, our percentage of customers who are 3 lender or above has come down to 2.4% close to 2.5% which was close to 1415% at peak. As the percentage have moved down, our rejections have also come down to about 35 36% and we expect this number to be there going forward.
Shreepal Doshi
The common reason of rejection is it just the lender cap or anything else.
Unidentified Speaker
It is a mix. It is also RL 2.0 with the lender cap as well as overall indebtedness. At the same time the other reason is customer no repayment behavior with us and others.
Shreepal Doshi
Got it. Enter what on the. On the second question on the OPEX front.
Sadananda Balakrishna Kamath
Yeah. Sri Pala Bala here. Now coming to your question on opex. Can you hear me?
Shreepal Doshi
Yeah. Yes sir, I can hear you.
Sadananda Balakrishna Kamath
Coming to Your question on OpEx. 6.7 was OpEx to asset ratio this quarter which was higher by 40 pips. But it is lower than our internal plan. This was very much envisaged by us and the increases due to two factors.
One is you are aware the gratuity we had to take a higher provision of around 18 crores due to the new labor code. That had an impact of 10 rups and balances mainly due to the business growth which we factored in. You know our dispersal was at an all time high. So it is towards that Q4 also will stay around same level. That’s what we are more or less anticipating.
Shreepal Doshi
So Q4 also we should see 6.7% sort of a cost to average asset, is it?
Sadananda Balakrishna Kamath
Yeah. Next year you should see an improvement. But this year it will be at the same level.
And this is what we had planned also in our budget for the year.
Shreepal Doshi
Got it, sir. Got it. Yeah. Thank you. Good luck for the next quarter, sir.
operator
Thank you. The next question comes from the line of Ashlesh Sonjay from Kotak Securities. Please go ahead.
Ashlesh Sonje
Hi team. Good evening. Two questions from my side. Firstly, if you can talk us, talk us through the loan mix which when we watch over the next year or so, how fast do you expect the share of MFI to decline or do you expect it to stabilize around current levels? That is one.
Secondly, if you can just summarize the rate cuts which you have taken on sa. Again I missed the numbers. And if you can also spell out what is the effect on the cost of SA you expect over the next quarter.
Sadananda Balakrishna Kamath
Coming to your first question, we are working on a budget for next year along with the medium term plans. Once it is concluded, we will share the details with you. Till then we remain committed to a Vision 2030. We are given all the detail there. You may refer to that.
Sanjeev Nautiyal
This quarter we have reduced our size in two buckets.
0 to 1 lakhs by 25 pips and 1 to 5 lakhs 50 pips. Overall, 46% of deposit lies here. SA deposit in these two buckets. So right now we are expecting rate to. I mean cost of fund around 7% here. Yeah, exactly.
Ashlesh Sonje
Cost of 7% for next quarter.
Sanjeev Nautiyal
Yeah, overall and right now size 5.2%. So some moderation will happen here around five times.
Sadananda Balakrishna Kamath
Also he wanted to add that the exit cost of fund by the year end would be around 7%.
Ashlesh Sonje
Okay, thank you.
operator
Thank you. The next question comes from the line of Deepak Podar from Safire Capital. Please go ahead.
Deepak Poddar
Yeah, I’m audible, sir.
operator
Yes, Deepak.
Deepak Poddar
Yeah. Okay. Thank you very much sir for this opportunity. So just first up wanted to understand I. I think you mentioned in your opening remark as well you expect a further moderation in the credit cost. And you did mention in your presentation as well our steady state credit cost of 1 to 1.5%. Right. So just wanted to understand by when we do expect the steady state credit cost we strive to achieve. I mean maybe what we are 2/4 away, 4/4 away. How should one look at it?
Unidentified Speaker
So Deepak, you know credit cost for us when we had guided, we said that credit cost in H2 will be significantly better and we will start seeing a lower trajectory.
As expected, Q3 has shown a very good improvement over Q2. And Q4 also will show an improvement over Q3, you know, in terms of normalization of credit cost, we can expect that next year the normalization should happen. You know, there will be some amount of stock available probably in the later buckets, which should get absorbed and which should get provided in Q1. I would say. So we could say that we are about 2/4 away.
Deepak Poddar
So ideally we can say by second half of FY27, one can expect a normalization of your credit cost. Right? That would be a fair assumption.
Unidentified Speaker
Yes. We are in the process. The normalization has started and you know, normalization of credit cost happens with a lag of NPA recognition. So that process has already started in Q3. And I would say that by the end of Q1 and Q2, we should see the normalization of credit cost.
Deepak Poddar
So I missed that. By end of what?
Unidentified Speaker
By end of Q1 and definitely by end of Q2.
Deepak Poddar
By end of first half. I mean.
Unidentified Speaker
That’s right.
Deepak Poddar
Okay. Okay. And my second question is on your ROA. I mean we have given our FY30 vision where we are seeing ROA of 1.8 to 2%.
Right. And I think currently only at. At a not normalized credit cost, we are at an ROE of 1.5%. So you expect this ROA profile of the company because we are going more towards secured book to be limited to that below 2% kind of a range. Because once you get that, I mean, currently your credit cost in the range of 2.1%. So on an average steady, steady state credit cost of 1 to 1.5% will give you a delta of around 0.5 to 1%. Right. So but still we are talking about ROE of 1.8 to 2%.
So just wanted to pick your brain. I mean, how do you think on it?
Sadananda Balakrishna Kamath
We are going to have a diversified book and as had in our plan for 2030, we have worked out the entire plan and definitely it is coming to the range, what you mentioned. Yes. So with the book which we envisage with more of secured and unsecured Tapering up to 30% by 2030, this plan can be achieved.
Deepak Poddar
Okay, and what is the assumption of secured book by FY 2030?
Sadananda Balakrishna Kamath
2030, we are assuming around 30 to 35% will be unsecured and the balance will be secured.
Deepak Poddar
So 65, 70% is secured and there we expect a 1.8 to 2% kind of a ROA profile.
Sadananda Balakrishna Kamath
Yes. This year will end around 50, 50. Slowly it will progress towards 30, 70 by 2030. Every year a round 5%.
Deepak Poddar
Every year. Okay, fair enough. I think Those are my two questions. That’s it. From my side all the way. Best to you. Thank you so much.
operator
Thank you. The next question comes from the line of Sucre Patil from Eyesight Fintrade. Please go ahead.
Sucrit Patil
Good evening, team. I have two questions. My first question is, as builds on its core and microfinance and affordable housing, how do you see the lending mix shifting over the next two to three years? And what role will digital onboarding and fintech partnerships play in scaling inclusions and strengthening customer support? That’s my first question.
I’ll ask my second question after this. Thank you.
Sanjeev Nautiyal
So while we have given the overall guidance up to financial year 2030 in terms of the various components and building blocks of business that we will have, we are revisiting the issue and preparing a three year strategy to further fine tune it. So may I request you to please wait till we finalize our three year plan and then come up to you with a specific iteration. So I would request you to just wait for some more for this quarter. We’ll be able to come back to you with greater details.
Sucrit Patil
Fine. My second question is, with strong capital adequacy and improving asset quality, how are you planning to sustain margins and cost efficiency as deposits and and secured lending expand? And how do you see digital cost efficiency shaping ROA and long term profitability in the coming quarters?
Gaurav Sah
Yeah, hi, hi. This is Gaurav. So with the improvement in the overall parameters across the unsecured landscape, we have started to see the credit cost moderation and that is leading to the increased profitability and the diversification. If you see the secured verticals, the new businesses that we had started to incubate around FY25 starting, they started to grow very well.
So they’ll soon add into the bottom line as well. We have trajectory for that and hence the overall profitability will move in the tandem of, as Mr. Naughty also said, towards the FY30 vision. So that’s the overall thing that we’re looking at. And on the liability front also just to add, we are looking to increase the CASA percentages which has come up to 27% in this financial year. We expect that to move towards 35% in our 30 vision. So all these things will play out and we look to have a, a consistent kind of a profitability matrices.
Sadananda Balakrishna Kamath
Just to add here, our CASA franchise is showing very good growth this year. We saw growth of 33.2% YoY and 7% QoQ. So we are confident of increasing CASA percentage going forward.
Sucrit Patil
Thank you for the Guidance and I wish the team best of luck for the next quarter.
operator
Thank you. The next question comes from the line of Rajiv Mehta from yes, securities. Please go ahead.
Rajiv Mehta
Oh thanks. Thanks so much. My question was on this, you know, on the collection team, I see some reduction in the collection team starting to happen in this quarter. And now with normalized collection efficiencies across businesses including microfinance, do you think what is the scope for, you know, optimizing this? Number two.
So that’s the number one question. And second is on the affordable housing disbursement. I can see some mild deceleration in this quarter on Q on Q basis. And I can also see that in affordable housing there’s a 20 bits of yield decline on Q on Q basis. So growth or pricing or competitive challenges in that particular segment because that’s how much is the segment for us.
Unidentified Speaker
So Rajiv, on the collection team, as you know that we’ve had four quarters of increased slippages and increased par which is now coming under control and we are now starting to show very good numbers on PAR as well as npa.
However, the entire stress has been in the microfinance book. So on micro banking there is a long tail which we already have. So we expect that in Q4 there will be no meaningful decline in the number of people in the manpower. But Q1 onwards we will start to see a decline of between 100 to 150 people on a quarter to quarter basis. On affordable housing, see we’ve moved towards 15 lakh of average ticket size. So the decline in yield that you’re seeing is largely because there has been a shift towards slightly higher ticket sizes. Point number one and point number two, there has also been increased competitive intensity in the market.
Rajiv Mehta
Got it. Thank you. Thanks and best of luck.
Unidentified Speaker
And there is of course Rajiv, something that I missed pointing out was, you know, repo cut which got passed on to customers. That has also had an impact. So the 20 basis points reduction is a factor of these three things.
Rajiv Mehta
Okay, thanks.
operator
Thank you. The next question comes from the line of Hitendra Pradhan from Maximal Capital. Please go ahead.
Hitaindra Pradhan
Sir. There are a couple of questions. One is on the CE MFU side. So how much of the insurance that we have paid in this quarter and what percentage of our incremental disbursements and loan book is getting covered under this?
Brajesh Joseph Cherian
Hitaindra, this is Brajesh here. So cgfmu, we cover a smaller portion. We do decide on the quantum to be insured depending upon the risk adjusted returns. And also we use this as a tail risk protection Strategy. So as based on each quarter, looking at the quality and requirement, we cover some portion but it’s very limited. It’s not a very high portion. What we cover at this point in time. Thank you.
Hitaindra Pradhan
So how much is the insurance amount that we have paid in this quarter?
Brajesh Joseph Cherian
This quarter, t his quarter we did 234 crores of coverage. It’s a premium payment of about 1 1.7 cr.
Hitaindra Pradhan
Okay. And secondly sir, as per your guidance for FY26 which is 10 to 12% of ROE.
So if you do a back calculation, you know the Q4 Pat has to see a meaningful jump by almost like 33% to almost 33% to 75% growth on a QOQ basis. So you know what could be the contributor towards such a sharp jump in the fourth quarter? Are we expecting a meaningful reduction in the credit cost? Because you mentioned that NIM and OPEX are probably going to be in similar line. So if you can comment on that.
Brajesh Joseph Cherian
We stand by our guidance. Whatever we are given, we are confident about it. There will be two key factors.
One is three key factors. First one is the dispersal will be at all time high with microfinance as well as secured book totally firing. Second point is the falling cost of funds as we had given a guidance of the funds will fall further towards the 7% level. And finally the credit cost as mentioned by our CCO it is going to be much lower in Q4 as compared to Q3. All this factor will contribute to us reaching the figure which you mentioned.
Hitaindra Pradhan
Okay. And finally sir, on micro mortgages, so we have seen a very high growth in this segment in this quarter both in terms of disbursements while we have also seen some par zero increasing maybe because of book seasoning.
So what are the trends that you are seeing in this particular segment? Because you know there are players who are facing challenges in this particular segment but we are growing fast despite having a slightly higher par 0 on a quarter on quarter basis. So if you can give some color on that.
Umesh Arora
Yeah, hi, this is Umesh. As far as micro mortgage is concerned, as we said that our book is somewhere around 1325 odd crores. And since the base itself is very low and we started around 1820 months crore back. So this absolutely the full tenure of 12 months we have seen in this last year only.
And that’s why on the percentage terms it looks like okay, very heavy but the base itself is low and that’s why it has shown. Second as far as NPAs are concerned, if we see that it was almost zero because the volume itself was negligible. And as on date also when we talk about it is somewhere like okay 0.3. So it is, it is like okay, going to a little bit sort of like matured once the portfolio will mature. But I think we are well under control on that.
Hitaindra Pradhan
But on the ground are you seeing any challenges on this particular segment b ecause we seem to be growing fast here.
Unidentified Speaker
So there are, you know, couple of points which I would want to add. One is the bucket tax collection efficiency. So in terms of bucket tax collection efficiency we have since inception never gone below 99.7%. Exit December we were between 99.7 to 99.8% on the overall bucket expellation efficiency with 12 mob being 99.9 and above. So therefore it’s been a stable portfolio for us with bucket X is the beginning of all the, you know, all the measurement that we do. Secondly, we also are aware of the fact that there is a slight amount of stress in the market in the lower ticket sizes.
We have as a strategy moved our average ticket size to 6 and a half and above. So now we operate between 6 lakhs to 12 lakhs as the, you know, as the predominant ticket size with some cases happening below 6 and some happening above 12 also. But we are reducing our dependence on the lower ticket sizes and we will see a steady growth in 6 to 12 lakh ticket size. In terms of geographies we are now present in almost 260 to 270 branches. So therefore, therefore you know it is very well diversified. We don’t have any, we don’t have any dependence on any geography.
Fourthly, this is a non DSA business which is 100% self sourced. Because of this reason we also feel that you know, since this is sourced through branches it should have a slightly better, you know, better asset quality. I’m sorry I mentioned 260 to 270 branches. We are at 317 now. 317.
Umesh Arora
And I would like to add here as far as LTV is concerned it is somewhere like 44, 45% LTV that we operate in. And one of the key emotional connect with the customer is 96% of such properties are SORP self owned residential properties. So that is giving us a comfort and DSA sourcing or like okay through third party is negligible.
So all is in house sourcing.
operator
Does that answer your question? Since there’s no response from the participant we’ll move to the next participant. Our next question comes from the line of Chintan Shah from ICICI Securities. Please go ahead.
Chintan Shah
Yeah, hello. Thank you for the opportunity and congratulations on strong set of numbers. So sir, firstly on the OPEX decline we mentioned OPEX to assets ratio could decline from 6.7% in the next year. But in case.
Unidentified Speaker
Sorry Chintan, we can’t hear you.
operator
So the participant has dropped. And so we’ll move on to the next participant that is Pritesh Bum. Please go ahead.
Pritesh Bumb
Yeah. Hi. Good evening sir. Congrats on a good set of numbers. One data giving question and two questions. One is I wanted breakup of slippages between MFI and non MFI and within that group and individual loans. If you can provide.
Sadananda Balakrishna Kamath
Request you to repeat the second question please.
Pritesh Bumb
Wanted breakup of slippages between MFI and non MFI and within MFI group and individual loans.
Sadananda Balakrishna Kamath
So the gross slippages, you know the average of micro finance is in the range of about 80% to the overall slippages. The total slippages we had for the quarter was 221 crores which is about 2.4% annualized.
Of this 80% comes from microfinance and the remaining 20% comes from all the other assets.
Pritesh Bumb
And within group Nil. If we can have a broad color?
Sadananda Balakrishna Kamath
Within group nil, 70% is from GL and 30% is from.
Pritesh Bumb
G ot it. The first question is that this West Bengal which is now our largest segment within the micro banking and we are seeing a lot of movement politically. Sirs, what is your thought process there now? Anything you are looking at as a major or any, you know, early indications of how that portfolio can behave.
Unidentified Speaker
Oh hi Pritesh. On West Bengal we recently also saw Bihari Life elections.
And you are right that you know in West Bengal, Tamil Nadu, Assam will also witness election in the next early next financial year. West Bengal we have been working for last about 18, 19 years and we have witnessed previous elections also. We don’t see much of disturbance as far as microfinance operations is concerned in West Bengal. This is also based on the fact that most of the portfolio in West Bengal like other states are mostly metro urban nature and our rural presence is limited. At the same time our overall diversification in terms of product among the customers between GL and IL within microfinance and then beyond microfinance also within OG one bank is also very healthy.
That gives us confidence that West Bengal is going to be okay right now also and next financial year as well.
Pritesh Bumb
Got it. The second question was in terms of CASA and deposits. So we’ve shown a decent growth this quarter. What are we doing to improve it further from this levels of 27% and we are at a comfortable CD ratio of about 85%. Now how are you going to look at deposits as some growth is coming back? And how do you think about deposit side?
Unidentified Speaker
Yeah. Hi Jintan. So casa, as we have given our prediction, we will maintain the same level this year and we will improve going next year.
Starting next year will improve, but this year it will be around the same level. Okay. And cost of fund we have already given our indication that it will be around 7%. So if you look at CASA, growth rate is 33%. Okay. Which we, which will make this kind of growth rate we’ll maintain for next quarter. Also.
Pritesh Bumb
Sorry, I was asking about CD ratio being comfortable.
Unidentified Speaker
Yeah, we, we. We will maintain around same level. Yeah, yeah.
Pritesh Bumb
G ot it. Okay. Thanks. Thanks.
operator
Thank you. Say, did you want to say something? Okay. Okay. We got our next question from the name from the line of Chintan Shah from ICICI Securities. Please go ahead.
Chintan Shah
Hello. Yeah, am I audible?
operator
Yes.
Chintan Shah
Yeah, yeah. Thank you sir for the opportunity and congratulations on a strong set of numbers. So sir, firstly on this OPEC decline which you are expecting in FY27 opex to asset decline. So this is despite assuming, even if we assume there is a universal bank license approval, despite that also we will see a decline in the opec. Will that be a fair assumption to me?
Unidentified Speaker
Yeah. Yes, it is. It should go in that direction. But as Mr. Nautil said that we are working on our plan and we’ll come back with the, you know, final figures and guidance for FY27 by the next quarter.
So I would request you to let us give us some time on that.
Chintan Shah
Sure, sure. And secondly on this mfip, I think last quarter we mentioned their power was relatively elevated in a few states, namely Karnataka, West Bengal and Bihar. So given that there is an improvement in the collection efficiency, so we can say that. So what is the current status in all the three states now the part is normalized across it or do we still have any states where the power seems to be relatively on the higher side?
Unidentified Speaker
Yeah, you know, we have seen the collection efficiency in 10 out of 10 states at 99.6% and above in November as well as December.
There was one blip in the month of October in the state of Gujarat that has also got recovered in November, December. So all our states are now above 99.6%. So as a result, you know, once the bucket tax collection efficiency is improved the power percentages will start to show a gradual decline.
Unidentified Speaker
Just one point is, you know last quarter we discussed that Karnataka as you know was on improving trend but there was scope for further improvement. Gujarat, we talked about, about north Karnata, north Gujarat where they were, they had some issue. Bihar was never an issue for us.
And so far, and you know in this quarter also Bihar has performed well.
Chintan Shah
Okay, sure. And just one last thing on the margin front, so assuming that we are now gradually moving every year by 5,5% almost towards the more secure thing also how do we expect the ease to trend on, trend from year on and will that decline in the yields? Assuming that we are moving from non MFI to from MFI to non mfi, will that be largely compensated by cost? Or we could also see some moderation in margin from a structural standpoint. Two, three year standpoint.
Unidentified Speaker
Hi Chintzan. So Chindan, we’ll give you the guidance but directionally what we see is that yields will come down since the book mix will continue to shift. However, there will be support of the lower cost of funds for the full year next financial year. So that is the overall direction. But please wait for the guidance.
Chintan Shah
Sure, sure. No worries. Okay, thank you and all the very best. Yeah, thank you.
operator
Thank you. The next question comes from the line of Sagar Shah from Spark Wealth Management. Please go ahead.
Sagar Shah
Yes, thank you for the opportunity and congratulations sir for a very good set of numbers.
My first question was related to our ROE actually going forward as our credit costs actually stabilize in next year and even better in FY28 and even our asset growth actually accelerates from here on. But I wanted to understand what are the key levers for ROI according to you? Actually that is my first question and my second question was related to the slide Number, slide number 20 when I was seeing the. I’ll book actually, I’ll book, I’ll book. The power ratio is actually increasing. So that was my second question sir.
Unidentified Speaker
So I’ll take the power question first.
So as I was describing, the bucketX collection efficiency in Q3 has been significantly better than Q2 with all 10 out of 10 states showing 99.6% and above and going up to 99.7% on an average in the month of December. So we have started seeing a very good revival in the bucketx efficiency. So our power over a period of time will start to show a declining trend on ielts. Specifically we have seen the SMA book decline two consecutive months between November, between October to November and November to December. So this trend hopefully will continue because we are seeing not.
We are not seeing any disturbance in the early bucket. Okay. But in ia we’ve also seen that the collections in the SMA book has also improved. Not just the bucket X collection but SMA collections have also started to see a very good improvement in Q3 compared to Q2. So that also gives us confidence that you know the bar will not translate to NP as it has been in the past which is showing in our reduced slippages ratio.
Sagar Shah
But server par 90 plus has gone up from 2.3 to 2.7. That was my question sir, on the IL front.
Unidentified Speaker
So this is. Yeah, so this is on account of two things. One, we had Karnataka which is largely responsible. We did have some stock which has moved to 90 plus. And yeah, so this Karnataka has been the outlier.
Unidentified Speaker
C ompared to what you see in microfinance, typical group loan is in il. Your repayment in the SMA bucket is also very good compared to GL as you collect better in SMA buckets. SMA01 and 2, the customers moving to NPA is on the lower side compared to GL and that due to lower write off as well.
But that is a good problem to have. Your SMA bucket is reduced. Well done because you are having higher percentage of collection in this bucket. We are very comfortable in il. We have been seeing IL doing better than gl, you know for the last five, six years including pandemic and during. Including the last year crisis. And we are very, very confident about IO going forward as well.
Sagar Shah
Okay. So basically we will see stabilization trends at least in the aisle par 90 as. As what I we can perceive from your commentary, right?
Unidentified Speaker
Yes.
Sagar Shah
Okay. And my second question sir was the key levers for our expansion in ROE sir from next year and even better in FY28.
Unidentified Speaker
So Sagar, we will leave you with the fact that our book mix changing in favor of select high yield products added to the fact that we will see credit costs coming down proportionate to the secured products that we run and a concerted effort to build on our other income streams. To comfort to maintain the ROA trajectory and guide that we are looking at as we move forward. Of course we will see the benefit of cost of funds supporting our ability to enter the and grow the unsecured products as well.
Sagar Shah
Okay, fine sir. Thank you. Thank you so much and all the best for future.
operator
Thank you. The next question comes from the line of mehul Panjwani from 40 cents. Please go ahead. May you please go ahead with your question and Kindly unmute your line in case if you’re on mute. Since there’s no response from the participant, we will move to the next participant. The question comes from the line of Kushwant Pawa from K Pac Marketing. Please go ahead.
Khushwant Pahwa
Hi, good evening. Am I audible? Congratulations on a good set of numbers. I just have, you know, two questions. The first one is purely data. When I look at your presentation, page number five ROA for nine months is given as 1.1% whereas in the results it is given as 0.84%.
I’m presuming that, you know, 1.1 is annualized and the other one is not. Is that correct?
Unidentified Speaker
So the page number five, five and where, sorry.
Khushwant Pahwa
P age number five of the presentation and in the results sheet for the nine months ended, you know, you give return on assets average there also. So in the presentation and the results both are uploaded on the website. So I’m comparing the two and I see return on assets at 0.84% in the results, quarterly results. There is in the PPP on page number five. Five in the five number written at the bottom, actually slide number six if I include the title slide.
So 1.1 is mentioned there. So I just wanted to understand, is it the difference? Just one is annualized, the other one is not.
Unidentified Speaker
So maybe we’ll check this and come back, we’ll reconcile if there is an error at our end.
Khushwant Pahwa
All right, but, but you know, if I go with what’s given in the results, that’s 0.84% and your guidance for this fiscal being 1.2% to 1.4%. Now March is also quarter where you will have your bonus payouts and everything. So, so, you know, how confident are you with the likelihood of additional, you know, employee related effects that you will actually, you know, be able to take the ROI guidance.
And how do you see it quarter on quarter improving from there on because, you know, Your vision is 1.8 to 2% eventually, but slowly, slowly you do need to reach 0.4 kind of quote on quarter numbers. So any comments on. On qualitative comments quantitative on this this year, but qualitative and long term, how do you see it panning out?
Unidentified Speaker
So on the payouts and all, just to tell you that we stand by our guidance and we see that our range of 1.2 to 1.4% ROA will be met. We are very confident about that and any additional expenditure is already incorporated in that.
So that we are very confident of falling in that range.
Unidentified Speaker
Kushwant Just to confirm, on the dual data that you mentioned, it is an annualized number which is reflecting in 1.1.
Khushwant Pahwa
Thank you so much for that. All the best.
Unidentified Speaker
Yeah. Thank you.
operator
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for the closing remarks.
Sanjeev Nautiyal
So I once again thank all the participants for their time and interest. We@ujivan SFB remain focused on delivering on profitable growth while we build an enduring institution.
Please reach out to our IR team for any queries that you may have. Thank you very much.
operator
Thank you, sir. Ladies and gentlemen, on behalf of JM Financial Institution securities limited that concludes this conference call. Thank you for joining us. And you may now disconnect your lines.