Jaipur headquartered AU Small Finance Bank (AU SFB) on Tuesday reported a 23% year-on-year rise in net profit for the quarter ended March at Rs 425 crore, primarily led by a strong growth in net interest income (NII) and stable asset quality.
AU SFB’s total advances rose 26% y-o-y to Rs 59,158 crore as on March 31, with retail loans accounting for 78% of total advances and commercial banking loans accounting for the rest. The bank’s gross yield on advances stood at 13.4% in the reporting quarter, flat on a yearly and sequential basis.
Deposits, meanwhile, rose 32% y-o-y to Rs 69,365 crore as on March 31, of which low-cost current account and savings account (CASA) deposit rose 36% y-o-y to reach Rs 26,660 crore as on March end. The bank’s CASA ratio stood at 38.4% in Q4FY23, flat on quarter and a tad higher than 37% during Q4FY22.
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On account of robust advances growth, the bank’s NII or the difference between earned and expended rose 30% y-o-y to Rs 1,213 crore during Q4FY23. Net interest margin (NIM), meanwhile, moderated to 6.1% during Q4FY23 as against 6.3% in Q4FY22.
“The Bank has delivered another quarter and another year of consistent performance across all parameters despite the challenges around inflation, liquidity leading to higher interest rates. Amidst a difficult market, we have managed to grow our deposit book while keeping our CASA ratio stable and making our deposits more granular and retail,” said Sanjay Agarwal, managing director and chief executive officer at AU SFB.
On asset quality front, AU SFB’s gross non-performing asset ratio (GNPA) continued moderating to 1.66% as on March 31, from 1.81% as on December 31 and 1.98% the previous fiscal. Net NPA, too, moderated to 0.42% as on March 31, as against 0.51% previous quarter and 0.50% a year ago. Provision coverage ratio stood at 75% as on March end, flat over previous fiscal.
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Other income, which includes fee from third-party services, profit or loss on sale of investments, recovery from loans written off and income from dealing in priority sector lending certificate, grew 7% y-o-y to Rs 333 crore during the reporting quarter.
“Core Other Income growth for FY23 is at 27% y-o-y driven by healthy growth in disbursements, increasing contribution of credit card & bancassurance income, and increasing share of transactional customers on the liability side,” the bank said in its Q4FY23 investor presentation.
The bank’s Board has recommended a dividend of Rs 1 per equity share of face value of Rs 10 each, fully paid-up out of net profit for the financial year ended March 2023, subject to shareholders’ approval.
Lastly, AU SFB’s capital adequacy ratio stood at 23.6% as of March end, of which tier-I capital stood at 21.8%. The bank’s shares ended 0.6% lower on Tuesday at Rs 660 apiece on the Bombay Stock Exchange. The lender declared its earnings post market hours.