AU Small Finance Bank's profit after tax up by 23% in September quarter

20 Oct 2022 , 06:01 AM

Despite increased provisions, AU Small Finance Bank recorded a 23% increase in net profit for the September quarter compared to the same period the previous year. A strong increase in total income also contributed to profitability.

There was a net profit after tax of Rs343 crores.

A crucial measure of the bank’s profitability, the net interest margin, was 6.2% for the quarter as opposed to 5.9% during the same time last year.

In comparison to the same quarter a year prior, total revenue increased by 40.3% to Rs2240 crore.

From Rs393 crore to Rs499 crore, operating profit increased by 27%.

While the asset quality has improved, the provisions and contingencies were significantly higher at Rs43 crore compared to Rs4.6 crore. At the end of September, the gross non-performing assets ratio was 1.9%, down from 1.96% three months prior. Net NPA stayed the same at 0.56%.

The provisioning coverage ratio for AU was 71% at the time. The bank made a provision of Rs667 crore for the gross NPA pool and Rs148 crore for the restructured book in addition to the contingency provision of Rs129 crore, the floating provision of Rs41 crore, and the standard provision of Rs162 crore.

At the end of September, the bank’s total advances increased by 6% to Rs52,452 crore from Rs49,349 crore three months prior. Deposits increased 7% from one quarter to the next, from Rs54,631 crore to Rs58,335 crore, and the CASA (current and savings account) ratio increased to 42%.

According to the bank, the steady increase in loan assets and continuous collection efficiency of 108% during the quarter contributed to a steady improvement in asset quality ratios.

Its return on assets for the second quarter was 1.8%.

Its stock price ended trading on Wednesday at Rs625.65, remaining constant from the previous closing level.

With tier I equity capital of Rs2,000 crore and tier II capital of Rs500 crore raised by AU during the reporting quarter, the capital adequacy ratio increased to 23.36% at the end of September.

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