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Au Small Finance Bank has reported 152% growth in net profit at Rs 479.02 crore for the quarter ended December 2020. The bank has posted healthy 25% growth in net interest income (NII), while the non-interest income of the bank zoomed 311% in Q3FY2021. The non-interest income of the bank has boosted by gains of Rs 480 crore from stake sale in Aavas Financiers. The Net Interest Margin (NIM) of the bank improved to 5.60% in Q3FY2021 compared to 5.50% in the corresponding quarter of previous year.
On business front, the loan book of the bank has increased 11% to Rs 33222 crore end December 2020. The CASA ratio of the bank has moved up to 22.0% at end December 2020.
Asset Quality: The bank has witnessed deterioration in asset quality on proforma basis with higher slippages in Q3FY2021.
GNPA ratio was at 0.99% and net NPA ratio at 0.24%. However, the GNPA ratio including proforma slippages of loans was at 3.3% and NNPA at 1.3%.
The collection efficiencies for Q3FY2021 is line with Q3FY20 with normalization across most segments.
The proforma fresh slippages of loans stood at Rs 714 crore in Q3FY2021. The bank has also recorded NPA reduction of Rs 126 crore for Q3FY2021.
The bank has sold NPAs of Rs 93.6 crore to ARCs with provisions held of Rs 85.6 crore.
The bank is holding provisions of Rs 395 crore against proforma slippages of Rs 714 crore. The overall provision coverage on NPAs including proforma slippages stands at 72%.
The restructured loan book of the bank stands at Rs 251 crore with provisions of Rs 48 crore.
| Asset Quality Indicators: AU Small Finance Bank |
|
Dec-20 |
Sep-20 |
Jun-20 |
Mar-20 |
Dec-19 |
Variation |
| QoQ |
YTD |
YoY |
| Gross NPA (Rs Crore) |
302.74 |
423.17 |
447.12 |
457.78 |
504.00 |
-28 |
-34 |
-40 |
| Net NPA (Rs Crore) |
72.69 |
122.83 |
163.19 |
217.30 |
268.14 |
-41 |
-67 |
-73 |
| % Gross NPA |
0.99 |
1.54 |
1.69 |
1.68 |
1.88 |
-55 |
-69 |
-89 |
| % Net NPA |
0.24 |
0.45 |
0.62 |
0.81 |
1.01 |
-21 |
-57 |
-77 |
| % Provision Coverage Ratio |
76.00 |
71.10 |
63.70 |
52.50 |
46.80 |
490 |
2350 |
2920 |
| % CRAR - Basel III |
18.84 |
21.47 |
21.72 |
21.99 |
19.28 |
-263 |
-315 |
-44 |
| Tier I - Basel III % |
16.30 |
18.30 |
18.50 |
18.40 |
16.50 |
-200 |
-210 |
-20 |
| 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 increased 21% YoY to Rs 46605 crore end December 2020, The advances rose at moderate pace of 10% to Rs 33222 crore. Deposits growth was strong moderated to 22% at Rs 29708 crore end December 2020.
Margins improve: The bank has showed sharp 60 bps YoY decline in cost of funds to 7.00%, while yield on fund decline only 40 bps YoY to 14.30% in Q3FY2021. Thus, the NIM has improved 10 bps YoY to 5.60%.
Branch expansion: The bank has network of 728 branches serviced through 18992 employees base end December 2020.
Book value of the bank stood at Rs 174.5 per share at end December 2020, while the adjusted book value (net of proforma NNPA and 10% of restructured advances) was Rs 160.9 per share at end December 2020.
Quarterly Performance
NII rises on higher margins: Bank has recorded 13% increase in the interest earned at Rs 1261.12 crore, while interest expenses rose 4% to Rs 627.99 crore in Q3FY2021. NII improved 25% to Rs 633.13 crore in the quarter ended December 2020.
Healthy growth in the non-interest income: Bank has posted strong 311% growth in non-interest income to Rs 663 crore in the quarter ended December 2020. The loan assets processing & other fees surged 16% to Rs 101 crore, followed by general banking & deposits related fees rising 56% to Rs 28 crore, income from sale of mf & other assets 125% to Rs 36 crore and bad debt recovery was flat at Rs 5 crore. However, the cross sell, distribution related fees & others dipped 30% to Rs 7 crore and pslc premium / fees was plunged 68% to Rs 8 crore in Q3FY2021.
Expenses ratio dips: The operating expenses of the bank increased 19% to Rs 423.69 crore, as other expenses moved up 9% to Rs 183.88 crore, while employee expenses jumped 28% to Rs 239.81 crore in Q3FY2021. Cost to income ratio dipped 32.7% in Q3FY2021 compared with 53.2% in Q3FY2020, allowing the Operating Profit to increase 179% to Rs 872.85 crore.
Provisions and contingencies zoom: The bank has showed 607% increase in provisions to Rs 283.62 crore.
Effective tax rate declined to 18.7% in Q3FY2021 from 30.3% in Q3FY2020. Net Profit rose by 152% YoY to Rs 479.02 crore during quarter ended December 2020.
Financial Performance 9MFY2021:
Bank has posted 81% increase in net profit to Rs 1001.71 crore in nine months ended December 2020 (9MFY2021). The net interest income increased 26% to Rs 1709.61 crore, while non-interest income moved up 125% to Rs 1174.90 crore, pushing up net total income by 54% to Rs 2884.51 crore in 9MFY2021. The operating expenses increased 10% to Rs 1099.77 crore, while provision and contingencies galloped 294% to Rs 522.28 crore. Profit before tax increased 69% to Rs 1262.48 crore in 9MFY2021. The cost-to-income ratio improved to 38.1% in 9MFY2021 compared to 53.0% in 9MFY2020. An effective tax rate declined to 20.7% in 9MFY2021 compared to 26.2% in 9MFY2020. The net profit has increased 81% to Rs 1001.71 crore in 9MFY2021.
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