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AU Small Finance Bank
has reported 4% decline in net profit at Rs 375.24 crore for the quarter ended
December 2023 (Q3FY2024). The bank has posted healthy 15% growth in net
interest income (NII), while the core fee income of the bank also improved 51%
in Q3FY2024. However, the Net Interest Margin (NIM) of the bank declined to
5.50% in Q3FY2024 compared to 6.20% in the corresponding quarter of previous
year.
On business front, the
bank as has posted 26% growth in business with strong 20% surge in loan book.
The asset quality of the bank was impacted by high slippages of loan in
Q3FY2024. Bank has substantially reduced the credit to deposit ratio to 84.4%
at end December 2023 from 92.2% at end December 2022. However, the CASA ratio
of the bank has declined to 33.0% at end December 2023 from 38.4% at end
December 2022.
Asset quality hit by
high slippages: The bank has witnessed pressure on asset quality and credit cost
due to higher fresh slippages of loans in Q3FY2024.
The fresh slippages of
loans stood at Rs 403 crore in Q3FY2024 compared with 349 crore in previous
quarter and Rs 231 crore in the corresponding quarter last year.
The recoveries, upgradations
and the write-off of loans was at Rs 308 crore in Q3FY2024.
The standard
restructured loan book of the bank declined to Rs 391 crore end December 2023.
Provision coverage ratio
declined to 72.00% at end December 2023 compared to 73.00% a quarter ago and
75.00% a year ago.
The capital adequacy
ratio of the bank stood at 20.8% with Tier I ratio at 19.5% at end December
2023.
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Asset Quality
Indicators: AU Small Finance Bank
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Dec-23
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Sep-23
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Jun-23
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Mar-23
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Dec-22
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Variation
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QoQ
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YTD
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YoY
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Gross NPA (Rs Crore)
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1339.68
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1244.75
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1121.23
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981.31
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1018.86
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8
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37
|
31
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Net NPA (Rs Crore)
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456.16
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384.72
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347.15
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245.16
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284.56
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19
|
86
|
60
|
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% Gross NPA
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1.98
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1.91
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1.76
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1.66
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1.81
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7
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32
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17
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% Net NPA
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0.68
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0.60
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0.55
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0.42
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0.51
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8
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26
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17
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% PCR
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72.00
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73.00
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73.00
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75.00
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75.00
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-100
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-300
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-300
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% CRAR - Basel III
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20.82
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22.43
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21.46
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23.59
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21.97
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-161
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-277
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-115
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% CRAR - Tier I -
Basel III
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19.50
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21.00
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19.90
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21.80
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20.00
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-150
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-230
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-50
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Variation in basis
points for figures given in percentages and in % for figures in Rs crore
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Business Highlights:
Healthy business growth:
The business of the bank
has increased 26% YoY to Rs 147744 crore end December 2023, driven by 20% surge
in advances to Rs 67624 crore. Deposits jumped 31% to Rs 80120 crore at end
December 2023.
CASA deposits ratio
declines: The
CASA deposits of the bank increased 13% YoY to Rs 26446 crore at end December
2023. The current account deposits increased 36% to Rs 3831 crore, while saving
account deposits increased 10% to Rs 22615 crore end December 2023. The CASA
ratio declined to 33.0% at end December 2023 compared to 38.4% at end December
2022, while declined from 33.9% a quarter ago.
The term deposits have
increased 43% to Rs 53674 crore end December 2023.
Strong loan growth: Advances growth was
driven by retail loans rising 2016% YoY to Rs 31822 crore at end December 2023,
while credit to agriculture increased 55% to Rs 5337 crore and MSME 15% to Rs
26222 crore at end December 2023. The corporate credit has increased 26% to Rs
4243 crore end December 2023.
Investment book of the bank jumped 39% YoY to Rs 26714 crore at end December
2023.
Margins decline: The bank has showed 90
bps YoY jump in cost of deposits to 6.90%, while yield on advances declined 20
bps YoY to 13.20% in Q3FY2024. Thus, the NIM has dipped 70 bps YoY to 5.50%.
Branch expansion: The bank has added 7
branches in Q3FY2024, taking overall tally to 1049 branches and 495 ATM`s end
December 2023.
Book value of the bank stood at Rs
181.9 per share at end December 2023, while the adjusted book value (net of
NNPA and 10% of restructured advances) was Rs 174.5 per share at end December
2023.
Quarterly Performance
NII growth slows as NIM declines:
Bank has recorded 29%
increase in the interest earned at Rs 2735.82 crore, while interest expenses
increased 46% to Rs 1410.95 crore in Q3FY2024. NII improved 15% to Rs 1324.87
crore in the quarter ended December 2023.
Healthy growth in the
core fee income: Bank has posted strong 51% growth in core fee income to Rs 433
crore, while treasury income surged 143% to Rs 17 crore, leading to 52% surge in
the overall non-interest income to Rs 449.69 crore in the quarter ended
December 2023.
Expenses ratio rises: The operating expenses
of the bank increased 25% to Rs 1117.48 crore, as other expenses moved up 38%
to Rs 588.73 crore, while employee expenses increased 14% to Rs 528.75 crore in
Q3FY2024. Cost to income ratio moved up to 63.0% in Q3FY2024 compared with
61.6% in Q3FY2023, helping the Operating Profit to increase 18% to Rs 657.08
crore.
Provisions and
contingencies surge: The bank has showed 387% jump in provisions to Rs 158.94 crore.
The loan loss provisions zoomed 125% to Rs 164 crore, while the bank has
written back standard asset provisions of Rs 6 crore.
Effective tax rate eased to 24.7% in Q3FY2024 from 24.9% in Q3FY2023. Net Profit declined 4%
YoY to Rs 375.24 crore during quarter ended December 2023.
Financial Performance
9MFY2024
Bank has posted 16%
increase in net profit to Rs 1163.97 crore in the nine month ended December
2023 (9MFY2024). The net interest income increased 19% to Rs 3820.05 crore,
while non-interest income moved up 70% to Rs 1190.27 crore, pushing up net
total income by 28% to Rs 5010.32 crore in 9MFY2024. The operating expenses
increased 28% to Rs 3159.51 crore, while provision and contingencies galloped
169% to Rs 306.23 crore, allowing profit before tax to increase 16% to Rs
1544.58 crore in 9MFY2024. The cost-to-income ratio was steady at 63.1% in
9MFY2024 compared to 63.0% in 9MFY2023. An effective tax rate declined to 24.6%
in 9MFY2024 compared to 24.8% in 9MFY2023. The net profit has increased 16% to
Rs 1163.97 crore in 9MFY2024.
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AU Small Finance Bank: Results
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Particulars
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2312 (3)
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2212 (3)
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Var %
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2312 (9)
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2212 (9)
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Var %
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2303 (12)
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2203 (12)
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Var %
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Interest Earned
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2735.82
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2118.07
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29
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7725.21
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5930.56
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30
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8205.41
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5921.73
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39
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Interest Expended
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1410.95
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965.34
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46
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3905.16
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2718.48
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44
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3780.13
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2687.61
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41
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Net Interest Income
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1324.87
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1152.73
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15
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3820.05
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3212.08
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19
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4425.28
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3234.12
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37
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Other Income
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449.69
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294.89
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52
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1190.27
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701.40
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70
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1034.46
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993.69
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4
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Net Total Income
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1774.56
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1447.62
|
23
|
5010.32
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3913.48
|
28
|
5459.74
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4227.81
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29
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Operating Expenses
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1117.48
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891.91
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25
|
3159.51
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2464.92
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28
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3440.27
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2412.77
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43
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Operating Profits
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657.08
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555.71
|
18
|
1850.81
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1448.56
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28
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2019.47
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1815.04
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11
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Provisions &
Contingencies
|
158.94
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32.64
|
387
|
306.23
|
113.96
|
169
|
154.84
|
360.97
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-57
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Profit Before Tax
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498.14
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523.07
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-5
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1544.58
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1334.60
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16
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1864.63
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1454.07
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28
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Provision for tax
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122.90
|
130.24
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-6
|
380.61
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331.31
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15
|
436.71
|
324.24
|
35
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PAT
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375.24
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392.83
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-4
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1163.97
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1003.29
|
16
|
1427.92
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1129.83
|
26
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EPS*(Rs)
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22.4
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23.5
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23.2
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20.0
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|
21.4
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16.9
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Adj BV (Rs)
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174.5
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152.9
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174.5
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152.9
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159.4
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226.3
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* Annualized on current equity of
Rs 668.77 crore. Face Value: Rs 10, Figures in Rs crore
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Source: Capitaline Corporate
Database
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