Suryoday's Bad Loans Fell to 2.9%. Here's the ₹591 Crore Behind It.
Suryoday Small Finance Bank says its gross bad loans fell to 2.9% of its book at the end of September, from 6.5% in June and 9.3% a year ago. The same filing says its loan book is shown "after considering a write-off of ₹591 Crore". Put the write-off back, and our estimate of the bad-loan ratio is about 6.6%, roughly where it was in June.
What the filing says
From Suryoday's Q2 update ([SSFB]), ₹ crore:
| Q2 FY27 | Q1 FY27 | Q2 FY26 | |
|---|---|---|---|
| Gross advances (incl. IBPC) | 14,972 | 14,376 | 11,124 |
| Total deposits | 16,184 | 14,634 | 11,991 |
| Bulk deposits | 2,514 | 1,852 | 1,675 |
| CASA ratio | 19.4% | 21.0% | 20.7% |
| GNPA ratio | 2.9% | 6.5% | 9.3% |
And at 30 September:
| ₹ crore | |
|---|---|
| GNPA | 438.31 |
| Provisions | 135.77 |
| NNPA | 224.51 |
| Balance claimable under CGFMU (a government credit guarantee) | 180.00 |
The arithmetic both ways
Our arithmetic, on the filed figures:
- As reported: GNPA ₹438 crore on a ₹14,972 crore book, the bank's 2.9%.
- With the write-off added back: if the whole ₹591 crore was bad loans, GNPA would be about ₹1,029 crore on a ₹15,563 crore book. That is about 6.6%.
- Against June: the ratio was 6.5% then. On this estimate, the underlying bad-loan level barely moved; the write-off did the work.
The filing doesn't say which loans were written off, so this is an estimate.
Two more numbers worth a look
- Thin provisions. Provisions of ₹135.77 crore cover 31% of GNPA (our arithmetic). The bank leans on the credit guarantee too: ₹180 crore is still "Claimable under CGFMU".
- NNPA doesn't add up. GNPA minus provisions is ₹302.54 crore, but NNPA is shown as ₹224.51 crore. The filing doesn't explain the ₹78 crore gap; guarantee claims may be netted, but it doesn't say.
Three small finance banks, three routes
Q2 filings from three small finance banks show three different paths on bad loans:
| Bank | Bad-loan ratio | Write-offs in Q2 | What drove the change |
|---|---|---|---|
| Ujjivan ([UJJ]) | 2.17% → 2.10% | ₹43 crore (₹213 crore a year ago) | not write-offs, which fell |
| ESAF ([ESAF]) | not given | ₹625 crore technical write-off | the bank presents it as a drag on loan growth |
| Suryoday ([SSFB]) | 6.5% → 2.9% | ₹591 crore | most of the fall, on our estimate |
Write-off definitions can differ between banks.
Moat and margin
Focus moat: cost advantage in underwriting. A small finance bank's edge is lending to small borrowers profitably. Over time, that shows up as low credit costs. One quarter's ratio after a large write-off doesn't show it either way.
The margin side. The write-off, provisions and any guarantee recoveries will run through Q2 profit. The update gives no P&L figures. Two more points from the same filing:
- Deposits grew 35% in a year, and bulk deposits jumped 35.7% in the quarter.
- CASA fell to 19.4% of deposits.
MoatSCORE: not yet scored. Suryoday is not on the Moat Screener ([MS]).
The bear case
- Cosmetic improvement. On our estimate, the underlying bad-loan ratio is still about 6.6%.
- Thin cover. Provisions cover 31% of GNPA, with guarantee claims of ₹180 crore still pending.
- Costlier funding. Bulk deposits up 35.7% in a quarter; CASA ratio down.
The case for
- Clean-up done. A large write-off resets the book; collection efficiency in the current bucket is 99.1%.
- Guarantee cover. The bank says it covers eligible loans under the government's credit guarantee scheme.
- Growth. Gross advances +34.6% and deposits +35% in a year.
What to watch
- Q2 results: credit cost, provisions and guarantee recoveries in the P&L.
- The GNPA ratio in December, with no further large write-off.
- CGFMU claims received against the ₹180 crore claimable.
Sources
- [SSFB] Suryoday Small Finance Bank, Q2 FY27 quarterly business update, 5 Oct 2026 (NSE)
- [UJJ] Ujjivan Small Finance Bank, Q2 FY27 business update, 3 Oct 2026 (NSE)
- [ESAF] ESAF Small Finance Bank, Q2 FY27 key business updates, 1 Oct 2026 (NSE)
- [MS] Moat & Margin, Moat Screener and How MoatSCORE works
Educational research, not investment advice. Every figure above is drawn from the banks' own filings, read from the primary documents on 6 October 2026; derived figures, including the "write-off added back" estimate, are our arithmetic and are labelled. Suryoday is not yet scored on the Moat Screener. No buy/sell recommendations, no price targets, no share prices. Moat & Margin is not a SEBI-registered Research Analyst or Investment Adviser.
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