AU Small Finance Bank reported a 23% rise in September quarter net profit over what it was in the same period last year despite higher provisions while a sharp rise in total income supported the profitability.
Net profit stood at Rs 343 crore as against Rs 279 crore.
The bank’s net interest margin, a key profit metric, was 6.2% for the quarter as compared with 5.9% in the same period last year.
Total income was 40.3% higher at Rs 2240 crore for the quarter under review against Rs 1597 crore a year back.
Operating profit rose 27% at Rs 499 crore against Rs 393 crore.
Its provisions and contingencies were sharply higher at Rs 43 crore against Rs 4.6 crore while asset quality has shown improvement. Gross non-performing assets ratio at the end of September was 1.9% as compared with 1.96% three months back. Net NPA was stable at 0.56%.
AU’s provisioning coverage ratio remained at 71%. Apart from provision of Rs 667 crore against the gross NPA pool, the bank made an additional provision buffer of Rs 148 crore against restructured book while contingency provision was Rs 129 crore, floating provision was Rs 41 crore and standard provision was Rs 162 cropre.
The bank witnessed a 6% growth in gross advances to Rs 52,452 crore at the end of September from Rs 49,349 crore three months back. Deposit collection grew 7% quarter-on-quarter to Rs 58,335 crore from Rs 54,631 crore with CASA (current and savings account) ratio improving to 42%.
The loan asset growth was coupled with consistent collection efficiency of 108% for the quarter, resulting in sustained improvement in asset quality ratios, the bank said.
For the second quarter, its return on assets stood at 1.8%.
Its share price closed Wednesday at Rs 625.65, unchanged from the preceding closing level.
AU raised Rs 2500 crore during the reporting quarter with tier I equity capital of Rs 2,000 crore and tier II capital of Rs 500 crore, leading the capital adequacy ratio rising to 23.36% at the end of September.
Source: Economic Times