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Au Small Finance Bank has reported 6% growth in net profit at Rs 200.81 crore for the quarter ended June 2020. The bank has posted healthy 30% growth in net interest income (NII), while the non-interest income of the bank also improved 7% in Q1FY2021. The Net Interest Margin (NIM) of the bank was stable at 4.80% in Q1FY2021 compared to 4.80% in the corresponding quarter of previous year.
On business front, the loan book of the bank has increased 17% to Rs 30044 crore end June 2020, while the bank has continued to maintain asset quality stable in Q1FY2021. The CASA ratio of the bank was stable at 16.0% at end June 2020.
During the quarter, Bank made provisions of Rs 181 crore including additional provision of Rs 140 crore for potential impact of COVID-19 in addition to Rs 138 crore COVID-19 provision created in last quarter (other than standard and NPA Provisions). The bank now carries Rs 278 crore of COVID-19 related provisions which constitutes 1% of total Gross Advances and 10% of Complete Moratorium book.
Asset quality stable: The bank has maintained stable asset quality in Q1FY2021.
The fresh slippages of loans stood at Rs 5 crore in Q1FY2021, while the recovery, upgradations and write-off together were higher at Rs 16 crore.
The Provision Coverage ratio jumped to 63.7% at end June 2020.
Complete Moratorium has been availed by 11% of borrowers by value on Gross Advances end June 2020. SMA pool, which was Rs 2768 crore (including securitized portfolio of Rs 298 crore) end February 2020 has now reduced to Rs 1133 crore (including securitized portfolio of Rs 113 crore) end June 2020.
| Asset Quality Indicators: AU Small Finance Bank |
|
Jun-20 |
Mar-20 |
Dec-19 |
Sep-19 |
Jun-19 |
Variation |
| QoQ |
YoY |
| Gross NPA (Rs Crore) |
447.12 |
457.78 |
504.00 |
503.84 |
485.70 |
-2 |
-8 |
| Net NPA (Rs Crore) |
163.19 |
217.30 |
268.14 |
282.85 |
289.00 |
-25 |
-44 |
| % Gross NPA |
1.69 |
1.68 |
1.88 |
2.01 |
2.08 |
1 |
-39 |
| % Net NPA |
0.62 |
0.81 |
1.01 |
1.14 |
1.25 |
-19 |
-63 |
| % Provision Coverage Ratio |
63.70 |
52.50 |
46.80 |
43.90 |
40.50 |
1120 |
2320 |
| % CRAR Basel III |
21.72 |
21.99 |
19.28 |
17.87 |
18.56 |
-27 |
316 |
| Tier I Basel III % |
18.60 |
18.40 |
16.50 |
14.90 |
15.50 |
20 |
310 |
| Variation in basis points for figures given in percentages and in % for figures in Rs crore |
Business Highlights:
Business growth eases: The total assets of the bank have surged 31% YoY to Rs 44267 crore end June 2020, The advances moved up 17% surge in advances to Rs 30044 crore. Deposits zoomed to Rs 26734 crore end June 2020 from Rs 19849 crore end June 2019.
Loan growth continues to moderate: The loan growth of the moderated sharply to 17% from 27% a quarter ago. The loan disbursement fell 70% to Rs 1181 crore in Q1FY2021. Advances growth was driven by retail loans rising 25% YoY to Rs 25168 crore at end June 2020.
Stable margins: The bank has showed sharp 70 bps YoY decline in cost of funds to 7.20%, while yield on fund declined only 10 bps YoY to 14.60% in Q1FY2021. NIM was stable YoY to 4.80%.
Branch expansion: The bank has network of 594 branches and 359 ATM's, serviced through 16092 employees base end June 2020.
Book value of the bank stood at Rs 148.1 per share at end June 2020, while the adjusted book value (net of NNPA and 10% of restructured advances) was Rs 142.8 per share at end June 2020.
Quarterly Performance
NII surges on strong loan growth: Bank has recorded 24% increase in the interest earned at Rs 1184.12 crore, while interest expenses moved up 19% to Rs 668.26 crore in Q1FY2021. NII improved 30% to Rs 515.86 crore in the quarter ended June 2020.
Treasury income spurts, supporting growth in the non-interest income: Bank has posted strong 7% growth in non-interest income to Rs 226 crore in the quarter ended June 2020. The loan assets processing & other fees dipped 78% to Rs 15 crore, followed by general banking & deposits related fees declining 29% to Rs 12 crore and cross sell, distribution related fees & others 43% to Rs 4 crore and PSLC premium / fees declined 20% to Rs 8 crore. However, the treasury income jumped 445% to Rs 158 crore supporting 7% growth in the overall non-interest income to Rs 226 crore.
Expense ratio dips: The operating expenses of the bank declined 6% to Rs 296.06 crore, as other expenses fell 10% to Rs 116.72 crore, while employee expenses also declined 4% to Rs 179.34 crore in Q1FY2021. Cost to income ratio dipped to 39.9% in Q1FY2021 compared with 52.0% in Q4FY2019, allowing the operating profit to increase 53% to Rs 445.60 crore.
Provisions and contingencies rises: The bank has showed 475% increase in provisions to Rs 181.25 crore. NPA provisions declined 105% to Rs 43.00 crore, while bank has created additional covid 19 related provision of Rs 140 crore.
Effective tax rate declined to 24.0% in Q1FY2021 from 26.6% in Q4FY2019. Net Profit rose by 6% YoY to Rs 200.81 crore during quarter ended June 2020.
Financial Performance FY2020
Bank has posted 77% increase in net profit to Rs 674.78 crore in year ended March 2020 (FY2020). The net interest income increased 42% to Rs 1908.94 crore, while non-interest income moved up 53% to Rs 706.09 crore, pushing up net total income by 45% to Rs 2615.03 crore in FY2020. The operating expenses increased 31% to Rs 1417.86 crore, while provision and contingencies galloped 100% to Rs 283.20 crore, allowing profit before tax to increase 58% to Rs 913.98 crore in FY2020. The cost-to-income ratio improved to 54.2% in FY2020 compared to 60.0% in FY2019. An effective tax rate declined to 26.2% in FY2020 compared to 34.2% in FY2019. The net profit has increased 77% to Rs 674.78 crore in FY2020.
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