Unity Bank plans to raise Rs 2,000 cr to fuel growth

On Expansion Mode:

• Unity Bank aims to increase its branch count to 225 and asset offices to 130 within 18 mths

• It aims for a loan book of over Rs 50,000 cr

• The bank has recorded 15% customer growth, assets close to Rs 9,000 cr

• It currently serves 18L customers and aims to reach 10 mn in 5 yrs

Hyderabad: Unity Small Finance Bank Ltd, a Scheduled Commercial Bank on Monday announced the opening of five new banking branches. By end of 2024, the bank will be opening three new branches in Hyderabad, Telangana and one each in Visakhapatnam and Vijayawada. To bolster growth, it will be raising capital of Rs 2,000 crore between FY25 and FY28, under the banks (promoters) commitment to the RBI.

Aiming diversification in the setting up of branches in different cities, customer profile and services, Unity Bank announced ramping up the number of banking branches from 182 to 225, and Asset offices (disbursing small business loan) to 130 from the current 100, across 19 States over the next 18 months.

“By November 1, 2024, all the offices will be converted into banking branch. By end of March 2025, we will be closing the financial year with nearly 400 branches, of which regular banking branches will be at 225 and Asset branches at 130, which will be reclassified as banking outlets. In liability side of banking we have witnessed customer growth by 15 per cent and the asset side of business is higher too. Right now the Bank serves 18 lakh customers,” said Inderjit Camotra, Managing Director and CEO, Unity Bank.

The officials said that Unity Bank’s Business Banking Group has offered secured and unsecured business loans to MSMEs resulting in a book size of more than Rs 5,000 crore, of which South India has contributed Rs 2,000 crore. In FY 2024, Telangana contributed 30 per cent of the total Business Banking Book.

Ranjan Ghosh, president, Unity Small Finance Bank, said, “We are growing rapidly over the last two years. Our liabilities have crossed Rs 8,000 crore on balance sheet, our assets are close to Rs 9,000 crore. Our Net NPA is at one per cent and gross NPA is just over four per cent. We plan to bring this further down. Our five year plan aim is to serve over 10 million customers and build a loan book of over Rs 50,000 crore.”

On a query about plans to raise funds, Ghosh said that one of their share holders, BharatPe which owns 49 per cent share, and Centrum Financial Services Ltd, the major share holder, are mulling on those lines.

“We will need capital in 2025-26 for our growth (invest into developing technology and increase the loan book). We have made a commitment to Reserve Bank of India that we will raise another Rs 2,000 crore capital between April 2025 and 2028. We do not need it this year but if the market is right, opportunity and investor is there then we might even consider, but that isn’t needed for growth,” the president said.