AU Small Finance Bank NII surges 54% YoY; net profit up 30%; board approves application for bank licence

The bank’s net interest margin expanded to 6% in Q1 from 5.7% in the same quarter last year. Its return on equity stood at 13.2%.

AU Small Finance Bank further said that it had obtained board approval to apply for a universal bank licence.

AU’s cost to income ratio saw a steep fall 509 basis points to 59.9%. A basis point is a hundredth of a percent.

The bank’s gross non-performing asset increased by 12 bps to 1.78% while net NPA increased 7 bps to 0.63%.

Its current-account-savings-account for the quarter stood at 33%; CASA plus retail term deposit was 70% while CASA plus retail term deposit plus non-callable bulk deposit stood at 85%.

Over the past two quarters, the bank management has focused on cost of funds, quality of deposits, increasing disbursement yields and improving share of high return-on-asset products, AU said.

It also carried out the merger of Fincare SFB, which it says progresses well without any disruption to operations.

“The bank now has total 1.08 crore customers, who it serves through 2,414 touchpoints across 21 states and four union territories,” the bank said in a release.

“Quarter one is seasonally a weak quarter, which got further impacted due to general elections and the heatwave. Despite these challenges, we delivered consistent performance across business parameters,” the bank said.

AU Small Finance Bank has made noticeable progress in its AU@2027 strategy. As part of this, the bank aims to achieve compounded annualised growth rate of 23-25% on both deposit book and asset book. It will also focus on increasing its mix of high-yield, high RoA assets to 75:25, with Fincare playing a key role in this.