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AU Small Finance Bank's profit jumps 53% to ₹858 crore as margins widen
The small finance bank grew deposits 29% and loans 25% in the September quarter, while its bad-loan ratio improved to 1.99%.
Key points
- AU Small Finance Bank's net profit rose 53% to ₹858 crore in the July-September quarter.
- Net interest margin widened to 5.8% from 5.5% a year earlier as the cost of funds fell.
- Gross bad loans improved by 42 basis points to 1.99%.
AU Small Finance Bank reported a 53% rise in net profit for the July-September quarter on Saturday, helped by wider lending margins and cleaner books.
Profit rose to ₹858 crore from about ₹561 crore a year earlier, according to the bank’s filing. For the first half of the financial year, profit was ₹1,654 crore, up 45%.
Net interest income grew 32% to ₹2,820 crore. The net interest margin widened to 5.8% from 5.5% a year ago as the bank’s cost of funds fell by 43 basis points to 6.41%. Core operating profit before provisions rose 31% to ₹1,480 crore.
The balance sheet kept growing quickly. Deposits rose about 29% to ₹1,70,460 crore and the gross loan portfolio 25.1% to ₹1,53,769 crore.
Asset quality improved. Gross bad loans fell by 42 basis points to 1.99% of loans, and net bad loans were 0.81%. For the half year, the bank’s return on assets was 1.7% and its return on equity 15.8%.
The lender also said ICRA had raised the outlook on its long-term rating to positive while reaffirming the AA rating. It named Anil Agarwal as senior executive group head for commercial and institutional banking and Amol Padhye as chief risk officer.
AU was among three banks on Saturday’s results calendar, with Kotak Mahindra Bank and IDFC First Bank. Its shares will react to the numbers when trading resumes on Monday.