- Total income rose to Rs 2,957 crore from Rs 2,240 crore in the same period a year ago
- It had logged a net profit of Rs 343 crore in the year-ago period
- The net interest income rose 15% on year to Rs 1,249 crore from Rs 1,083 crore last year
NE BUSINESS BUREAU
MUMBAI, JAIPUR, OCT 28
AU Small Finance Bank on Saturday reported 17 percent rise in standalone net profit at Rs 402 crore for September quarter 2023-24 aided by improvement in interest income.
The Jaipur-based lender had logged a net profit of Rs 343 crore in the year-ago period.
Total income rose to Rs 2,957 crore from Rs 2,240 crore in the same period a year ago, AU Small Finance Bank said in a regulatory filing. Net interest income of the bank improved to Rs 1,249 crore from Rs 1,083 crore in September 2022. Net interest margin stood at 5.5 per cent at the end of September 2023.
The bank’s gross non-performing assets (NPAs) stood at 1.91 percent of gross advances at the end of the September quarter 2023 as against 1.90 percent a year ago.
“The core other income growth is at 69%, driven by healthy growth in disbursements, increasing contribution of credit card and bancassurance income, and increasing share of transactional customers on the liability side,” it said in its investor presentation.
“Asset quality remains within our range with some seasonal forward bucket movement, as is synonymous with H1 of any FY and tends to stabilize post festive season,” it said. “There are no specific pockets of stress or any EWS and the credit cost has begun to normalize after being at historic lows in the post-covid recovery period.”
The bank’s provisions jumped over twofold during the quarter to Rs 114 crore from Rs 42 crore last year. Out of the total provisions, the bank has set aside Rs 96 crore against contingency and standard restructured books. AU Small Finance Bank recorded a 24% growth in gross advances to Rs 65,029 crore, same as announced in its provisional figures on Oct. 4. Its deposits also rose 30% to Rs 75,743 crore.
Current account, savings account ratio stood at 33.9%, down 110 bps on a sequential basis. Out of the total loan book, 88% of it is retail loans, but only 9% is unsecured, according to a release. “After choosing to consume excess liquidity in Q1, the bank has grown its deposits by 9% QoQ and 30%…. The deposits continue to reprice,” it said.
Commenting on the performance, Sanjay Agarwal, MD & CEO, AU Small Finance Bank said, “The global environment remains challenging with uncertainties around geo-politics, supply chain disruptions and inflation continuing to put persistent pressure on interest rates. The Indian economic environment looks strong and resilient and continues to provide a multitude of growth opportunities across various sectors. However, challenges around inflation, liquidity and disruptions in weather patterns remain, warranting caution as a lender and we remain watchful and responsive in caliberating our strategy.
In this backdroup, our performance in Q2’FY24 was resilient and sustainable with growth across deposits, digital and advances. This resilience is further complemented by the positive outlook in AU markets, where there are promising prospects for growth and market penetration. Our key strategic focus is on building low-cost retail deposits, even in the current environment of elevated costs and intense competition. Our newely created ‘Swadesh Banking’ group is focused on furthering our financial inclusion strategy by penetrating deeper in rural India, where a significant unbanked population resides. Additionally, our new brand campaign “Soch Badlo aur Bank Bhi” will continue to establish a robust brand presence and fostering top-of-mind recall.
While being watchful, I am quite optimistic about the Indian economy in the long term and the banking sector looks poised for sustained period of growth. The business is excelling on all fronts, instilling great confidence in us to affirm our FY24 guidance set forth at the start of this fiscal year and we continue to focus on sustainable growth, aiming to further fortify our balance sheet.”
