AU SFB Q1 Profit Jumps 37% to Rs 796 Cr
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AU Small Finance Bank (SFB) reports a 37% jump in Q1 profit to Rs 796 crore, driven by lower provisions & expanded net interest margin. Plans universal bank transition.
Mumbai, Jul 25 (PTI) AU Small Finance Bank (SFB) on Saturday reported a 37 per cent jump in June quarter profit at Rs 796 crore, helped by a lowering in provisions and expansion in the net interest margin (NIM).
The lender, which is on its way to transition to a universal bank, had reported a net profit of Rs 581 crore in the year-ago period and Rs 832 crore in the quarter-ago period.
Its Executive Director Vivek Tripathi said this is one of the best first quarters in the last many years, and the lender has achieved over 20 per cent of the budgeted business instead of the usual 15 per cent in the first three months of the fiscal year, which are generally presumed to be seasonally soft for the banking system.
"There was robust demand despite the headwinds like geopolitics, and the same is seen through our business and also high frequency indicators like growth in GST, e-way bills etc," he said.
For the reporting quarter, core net interest income grew 32 per cent to Rs 2,695 crore in the reporting quarter on the back of a 23 per cent loan growth and a 0.47 per cent expansion in the NIM to 5.9 per cent.
Tripathi said the growth in retail deposits was higher than the bulk deposits during the quarter, and added that the cost of funds have bottomed out with an improvement of 0.01 per cent during the quarter.
Despite setting aside an additional Rs 23 crore due to changes in policies, the overall provisions declined 30 per cent to Rs 371 crore, majorly after the normalisation in the microfinance and credit card portfolios, Tripathi said.
The overall slippages declined 22 per cent to Rs 798 crore from Rs 1,022 crore in the year-ago period, but were higher than the Rs 659 crore in the quarter-ago period.
The gross non-performing assets (GNPA) ratio came at 2.10 per cent as against 2.47 per cent in the quarter-ago period.
Tripathi said the bank does not see any challenge on the asset quality front in the near term, stressing that the jump in fuel prices and the scant rainfall have not affected the book quality.
He, however, added that analysis undertaken by the bank has shown that the rabi or winter crop will be impacted because of the rainfall issues, pointing out that impact, if any, will play out in the March 2027 or June 2027 quarter.
Transition to expected credit loss-based system of provisioning is being seen as 'neutral' or 'neutral to positive', Tripathi said, adding that the bank has engaged an external consultant to help on the same.
It announced the elevation of Yogesh Jain as the deputy chief executive from being the chief operating officer till now, and Tripathi added that the transition to universal bank will see more appointments on the managerial front.
The rest of the work for the universal bank, which will be called 'AU Bank', will be communication activities and changing of branding, he added.
The lender, which is on its way to transition to a universal bank, had reported a net profit of Rs 581 crore in the year-ago period and Rs 832 crore in the quarter-ago period.
Its Executive Director Vivek Tripathi said this is one of the best first quarters in the last many years, and the lender has achieved over 20 per cent of the budgeted business instead of the usual 15 per cent in the first three months of the fiscal year, which are generally presumed to be seasonally soft for the banking system.
"There was robust demand despite the headwinds like geopolitics, and the same is seen through our business and also high frequency indicators like growth in GST, e-way bills etc," he said.
For the reporting quarter, core net interest income grew 32 per cent to Rs 2,695 crore in the reporting quarter on the back of a 23 per cent loan growth and a 0.47 per cent expansion in the NIM to 5.9 per cent.
Tripathi said the growth in retail deposits was higher than the bulk deposits during the quarter, and added that the cost of funds have bottomed out with an improvement of 0.01 per cent during the quarter.
Despite setting aside an additional Rs 23 crore due to changes in policies, the overall provisions declined 30 per cent to Rs 371 crore, majorly after the normalisation in the microfinance and credit card portfolios, Tripathi said.
The overall slippages declined 22 per cent to Rs 798 crore from Rs 1,022 crore in the year-ago period, but were higher than the Rs 659 crore in the quarter-ago period.
The gross non-performing assets (GNPA) ratio came at 2.10 per cent as against 2.47 per cent in the quarter-ago period.
Tripathi said the bank does not see any challenge on the asset quality front in the near term, stressing that the jump in fuel prices and the scant rainfall have not affected the book quality.
He, however, added that analysis undertaken by the bank has shown that the rabi or winter crop will be impacted because of the rainfall issues, pointing out that impact, if any, will play out in the March 2027 or June 2027 quarter.
Transition to expected credit loss-based system of provisioning is being seen as 'neutral' or 'neutral to positive', Tripathi said, adding that the bank has engaged an external consultant to help on the same.
It announced the elevation of Yogesh Jain as the deputy chief executive from being the chief operating officer till now, and Tripathi added that the transition to universal bank will see more appointments on the managerial front.
The rest of the work for the universal bank, which will be called 'AU Bank', will be communication activities and changing of branding, he added.
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