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AU Bank June Quarter Results: Net Profit Rises 32% To Rs 268 Crore On Better Asset Quality

The total income of AU Bank rose 26 per cent to Rs 1,979 crore, boosted by a 35 per cent jump in net interest margin to Rs 976 crore

Small finance lender AU Bank on Wednesday reported a 32 per cent year-on-year (YoY) growth in net income to Rs 268 crore in the June quarter on better asset quality and higher loan sales that grew more than fourfold.

The biggest boost to the bottom line has come from a massive improvement in the asset quality with gross steeply falling to 1.96 per cent YoY from 4.31 per cent and the net NPA plunging to 0.56 per cent of net advances from 2.26 per cent in the pandemic hit June 2021, its managing director & chief executive (CEO) Sanjay Agarwal said.

Coupled with the vastly improved asset quality, the cost of funds came down to 5.7 per cent on the back of a steep 39 per cent jump in low-cost Casa deposits/liabilities from 26 per cent a year ago, improving margins and also leading to wider spreads as the net interest margin (the income a lender earns from lending after paying for the funds) grew to 5.9 per cent and the cost of funds declined by 57 bps to 5.7 per cent.

The total loan book grew 37 per cent to Rs 50,161 crore, of which 90 per cent is in retail and 94 per cent is secured.

The total income rose 26 per cent to Rs 1,979 crore, boosted by a 35 per cent jump in net interest margin to Rs 976 crore.

The Jaipur-based lender said its disbursals grew to the best to Rs 8,445 crore in the quarter, up 345 per cent year-on-year, while collection efficiency grew to 105 per cent year-on-year. Together with a 48 per cent deposit growth to Rs 54,631 crore, its balance sheet grew 38 per cent to Rs 71,041 crore.

Of the disbursals, fund-based disbursements grew to 8,445 crore from Rs 1,897 crore, while non-fund disbursements soared five times to Rs 481 crore from Rs 79 crore a year ago.

While gross NPA declined marginally to 1.96 per cent, net NPA also improved to 0.56 per cent and the standard restructured assets declined to 2.1 per cent from 2.5 per cent. This had the provision coverage ratio remaining at 72 per cent up from 49 per cent a year ago.

Apart from a provision of Rs 654 crore against bad loans, the bank has, additionally, maintained a provision against restructured books worth Rs 170 crore (16 per cent of the restructured book), a contingency provision of Rs 144 crore (0.30 per cent of advances), floating provision of Rs 41 crore (0.08 per cent of advances) and standard provisions of Rs 147 crore (0.30 per cent of advances).

Meanwhile, the bank today launched what it claims to be the country's first customisable credit card, which provides freedom to the customer to dynamically choose card benefits. It already has a credit card customer base of 2.4 lakh.

During the quarter, it added 34 new touch-points, taking its physical network to 953 across 20 states and two Union territories.

The AU counter closed 1.8 per cent up at Rs 576 on the BSE, while the benchmark rallied 1.15 per cent. 

(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)

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