New Delhi: Jaipur-based AU Small Finance Bank Limited has said it witnessed a significant improvement in the overall business environment, resulting in strong disbursements. It posted a 68 per cent growth in net profit for the quarter ending in December 2021.
The bank said its net profit for Q3 rose to Rs 302 crore.
Fund-based disbursements increased 33 per cent in the reporting quarter to Rs 8,152 crore, as the operating environment normalised, while the non-fund disbursements jumped 54 per cent to Rs 627 crore, the bank said in a news release.
Its overall assets under management jumped 26 per cent to Rs 42,023 crore in the quarter.
The Board of Directors of AU Small Finance Bank Limited at its meeting held on Friday approved the financial results for the quarter and nine months ended December 31, 2021.
Here are the financial highlights for Q3’FY22:
Financial results
- Net profit for the quarter rose to ₹ 302 Crore
- Net Interest Margin (NIM) at 6.3%
- ROA stood at 2.2% and ROE at 17.4%
- The average cost of funds reduced to 5.9% from 6.7% in the same quarter last year
If we look at the asset quality then the bank’s Asset quality continued to improve significantly with GNPA at 2.6% as against 3.2% in the previous quarter. The net NPA stood at 1.3% of net advances against 1.7% in the previous quarter. The collection efficiency averaged 106% as compared to 97% last year for the same period. The bank has also additionally, maintained a contingency provision buffer of ₹ 300 Crore (75 bps of advances) over and above provisions for GNPA, Restructured book, and standard provisions.
Growth in digital & payments platform
Along with the improvement in asset quality, the bank's properties like AU 0101, Video Banking, Credit cards, UPI QR etc. also witnessed a strong momentum. The Bank has issued 1 Lakh+ Credit card and installed 3 Lakh+ QR codes till now. The bank also saw a surge in the growth of new customers as of the total credit card issued, over 53% of customers are first-time users in more than 150 districts of the country since the launch. The video banking experience has been quite encouraging in terms of enhancing reach, acquisition, and engagement. Customers opted for the easy digital experience as 31 % Savings Account opened digitally through AU 0101 and Video Banking during this quarter.
AU Bank's overall performance with Q3’FY2022 PAT of ₹ 302 Crore
- Asset quality improved further - Gross NPA reduced to 2.6% from 3.2%
- CASA ratio increases to 39% with overall Deposits growth of 49% YoY
- Business growth momentum continues - Quarterly disbursement of ₹ 8,152 Crore (+33% YoY) leads to Asset growth of 26% YoY
- AU Bank welcomes Shri H R Khan, ex-Deputy Governor of RBI, as an Independent Director
- CRISIL upgrades its rating outlook on long-term debt and fixed deposit programme of the Bank to ‘Positive’ from ‘Stable’
Commenting on the performance, Sanjay Agarwal, MD & CEO, AU Small Finance Bank said, "In Q3'FY22, we saw continued improvement in the operating environment and borrower cashflows. These factors along with the secured nature of our loan book led to significant asset quality improvement in the quarter, along with continued improvement across all other key focus areas. These include improving the granularity of our deposit base, healthy asset growth driven by small-ticket secured loans, increasing adoption of our digital properties following the launch of our super app AU 0101, QR codes, and credit card offerings, and improved visibility and brand recall following our brand campaign. Our confidence in our borrower base, the power of the banking platform, and our own business model of small-ticket secure lending have been reinforced. Given our strong lending model, the increasing granularity of deposits, growing reach, and evolving digital properties, I feel we are well-positioned to take advantage of the significant opportunities in the segments we are present in. Nonetheless, we remain cautiously optimistic in our approach as the situation around the pandemic remains fluid”.