Balance Sheet Analysis

The term balance sheet refers to a financial statement that reports bank’s assets, liabilities, and
shareholder equity at a specific point in time. Balance sheets provide the basis for calculating rates
of return for investors and evaluating bank’s capital structure.

To begin with the analysis of balance sheet first we have to gain some insights of the term involved in
construction of balance sheet

 Capital and Liabilities-Liabilities are items that the bank owes to someone else, including
deposits and bank borrowing. Capital is sometimes referred to as “net worth”, “equity
capital”, or “bank equity”. Bank capital are funds that are raised by either selling new equity
in the bank, or that come from retained earnings (profits) the bank earns from its assets net
of liabilities

 Assets-Assets earn revenue to the bank and includes cash, securities, loans, and property
and equipment that allows it to operate. The assets include everything that the bank owns,
from cash in its vaults, to bank branch buildings, through to government bonds and various
financial products. Loans made by the bank usually account for the largest portion of a
bank’s assets.

Now let’s start to analyse the BALANCE SHEET of UTKARSH SMALL FINANCE BANK with financial data
of FY 2023 and FY2022
 BALANCE SHEET
191,175M 191,175M

200,000M 150,638M 150,638M

2023 2022

The bank stick to CAPITAL/LIABILITIES and ASSETS good growth of 26.91% from the FY 2022 to 2023.
In FY2022, it was 150638 million, while in the FY 2023, it rise to 191175 million. Various factors
contributed to this increase in CAPITAL and LIABILITIES, including expansion into new markets,
opening of new branches, the introduction of micro-ATMs, portfolio diversification, and an improved
customer experience driven by digital approach.

The ASSETS segment played an important role in the balance sheet by providing the financial
condition of unbanked and underbanked customer in both rural and semi-urban areas of the
country. The bank offered an extensive range of financial products such as retail loans, unsecured
loans, business loans, personal loans, as well as secured loans such as loans against property.
Moreover, the bank provided wholesale lending services, (short-term and long-term loan facilities)
for (SMEs), medium and large corporations, institutional clients, and gold loans.

COMPONENTS OF BALANCE SHEET

After getting the Balance Sheet Components of Utkarsh Small Finance Bank we will now analyse the
Capital / Liabilities and Asset Component on individual basis so that we can have clear idea that
which factors majorly play an important role in Bank’s overall growth
 CAPITAL AND LIABILITIES
191,175M
200,000M
180,000M 150,638M
160,000M 137,101M
140,000M 100,742M
120,000M
100,000M 6,768M
80,000M 25,719M 8,454M
60,000M 8,955M
23,495M
40,000M 8,959M 11,044M 10,576M
20,000M
M
l ..
ES ta lu
s its gs vi.
TI pi rp os in o
ILI Ca u p w Pr
B d
S De rro nd
LIA an Bo sa
ND ve
s
tie
LA er li
s bi
TA Re ia
PI rL
CA he
2023 2022 Ot

As we have seen earlier that there is rise of 26.91% in Capital and Liabilities from FY2022 to FY2023

The major factor for the growth is DEPOSITS where the customers park their money to complete
their financial needs. Deposits can be in any form Savings Accounts/Current Account/Retail Term
Deposits/ITD, aggregate deposits stood at 137101M during FY 2023 compared to 100742M in FY
2022, with growth of 36.09% because During FY 2023, the customer experience. Efforts were made
to make digital channels, comprising mobile banking, net banking, tab banking, corporate internet
banking, digital onboarding, self-onboarding, UPI payment, and CRM, among others. Total
onboarding was 0.5M savings account through digital onboarding during FY 2023. The total
depositors with Bank as was 2M in FY 2023

The total capital infusion was 8959M(FY2023) and 8955M(FY2022), there is slight growth in Capital
because FY2022 was not very much profitable so the stakeholder’s infusion was less in FY2023.The
Reserves and Surplus has grown from 6768M(FY2022) to 11044M(FY2023) to cater with unforeseen
losses in future or writing off the bad debts. The overall rise of Capital+Reserves and Surplus stood at
27.22% from FY 2022 to FY2023

Now let’s see the contribution of Assets how they helped in banks overall growth
 ASSET
191,175M
200,000M
150,638M
160,000M 130,688M
102,281M
120,000M
80,000M 17,979M 23,479M 2,865M 3,295M
28,594M
40,000M 11,921M 13,243M 3,033M 3,697M
738M
M

2023 2022

The major factor for increase in Asset is LOANS and ADVANCES where the customer lends money
from bank. The ADVANCES can be in any form like Micro finance, Retail assets (MSME), Wholesale
lending, Commercial vehicle and construction equipment loan, Housing loans. There was an overall
growth of portfolio from 102281M(FY2022) to 130688M(FY2023) leading to rise by 27.77% because
of MSME loans and housing loans cross the milestones of 1,5000M and 5000M respectively. Micro
finance business grew by 15.16% during FY 2022-23 to reach 9,2150M as on March 31, 2023.
Additionally, FY 2023 also saw us enter partnerships for the launch of new products in retail assets
such as dealer finance overdraft and personal loan through mobile application-based lending. Bank
also partnered with Yubi and Moneyboxx Finance Limited during FY 2023 for asset partnership on
online platforms. The Cash/Balances with Regulator Reserve Bank of India decrease from
17979M(FY2022) to 11921M(FY2023) because bank liquidated funds and used for gaining higher
profitability.