Mumbai: Ujjivan Small Finance Bank Ltd registered a net loss of Rs11.95 crore during the second quarter of the current fiscal year, compared with a net profit of Rs73 crore in the year-ago period.

Sequentially, the small finance bank (SFB) narrowed its loss from Rs75 crore in the April-June quarter.

“The losses narrowed on account of better recovery rates, cost controls and reduction in cost of funds. For loans disbursed since January 2017, we have seen a recovery rate of 99.7%," said Samit Ghosh, managing director and chief executive at Ujjivan.

Its gross non-performing assets (GNPAs) declined to 4.99% of the loan book from 6.16% in the last quarter.

Profitability of the Bengaluru-based SFB was hit by the impact of demonetization on its microfinance portfolio, which saw a sharp increase in non-performing assets (NPAs) because of the invalidation of high-value banknotes on 8 November. Loan recoveries at microfinance companies fell across the board after demonetisation, which made it difficult for small borrowers to repay loans. As much as 96% of Ujjivan’s loan book is made up of microfinance loans.