AU Small Finance Bank’s net profit up by 30% y-o-y in Q1

26 Jul 2024 , 10:52 AM

On Thursday (July 25), Jaipur-based AU Small Finance Bank Ltd reported a 30% YoY increase in net profit to ₹502.6 Crore for the first quarter ended June 30, 2024. In the same quarter, AU Small Finance Bank reported a net profit of ₹387 Crore, according to a regulatory filing.

Net interest income (NII), which is the difference between the interest revenue a bank gets from its lending activities and the interest it pays to depositors, rose 54% to ₹1,920.5 Crore, from ₹1,246 Crore in the equivalent quarter of FY24.

The gross non-performing asset (GNPA) ratio was 1.78% in the June quarter, compared to 1.67% in the March quarter. Net NPA was 0.63%, compared to 0.55% in the previous quarter. In monetary terms, GNPA stood at ₹1,613.2 Crore against ₹1,237.4 Crore quarter-on-quarter. Net NPA came at ₹562.6 Crore against ₹401 Crore in the previous quarter.

AU Small Finance Bank’s pre-provisioning operating profit (PPoP) increased by 81% year on year to ₹988 Crore, up from ₹546 Crore in Q1 FY24. The net interest margin (NIM) for Q1 FY25 was 6%. Furthermore, the bank’s cost-to-income ratio fell by 509 basis points year on year, to 59.9% in the first quarter of fiscal year 25.

Return on assets (ROA) and return on equity (ROE) were measured at 1.6% and 13.2%, respectively. In Q1 FY25, AU SFB’s other income jumped by 73% to ₹546 Crore over the previous year. This expansion was fuelled by increased fee revenue, third-party product distribution, and credit card operations.

Despite a modest reduction in total bank deposits to ₹97,290 Crore as of June 30, 2024, from ₹97,704 Crore on March 31, 2024, the bank concentrated on developing retail deposits while carefully retiring high-cost deposits. This approach resulted in a 7-bps reduction in the cost of funds (CoF) in Q1 FY25 versus the proforma merger CoF in Q4 FY24.

CASA (current account and savings account) deposits increased by 2% to ₹32,035 Crore, with the bank maintaining a 33% CASA ratio. The combined CASA and retail term deposits (TD) remained at 70% as of June 30, 2024.

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