AU Small Finance Bank shares surge on universal bank bid

4 Sep 2024 , 12:34 PM

AU Small Finance Bank’s shares surged 2% on Wednesday to a day high of 686.40 on the BSE after the business revealed on Tuesday that it has applied to the Reserve Bank of India (RBI) for a voluntary shift from a small finance bank to a universal bank.

“We wish to inform that the Bank has submitted an application to the Reserve Bank of India (“RBI”) to seek approval for voluntary transition from a Small Finance Bank to Universal Bank today i.e. on September 03, 2024,” said the bank in its statement to the exchanges.

Earlier in July, the bank’s board approved submitting this application to the central bank for the transition and forming a committee to examine the application for submission.

The committee consisted of chairman HR Khan, independent directors Pushpinder Singh and MS Sriram, and managing director Sanjay Agarwal.

AU is one of two small financing institutions that are now qualified to apply. The other bank is Ujjivan Small Finance Bank.

AU Small Finance Bank’s net profit increased by 30% year on year (YoY) to Rs 503 crore in the June quarter, driven by a 54% YoY increase in net interest income to Rs 1921 crore, while the net interest margin increased to 6% from 5.7% the previous year.

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