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AU Small Finance Bank has reported 13% decline in
net profit at Rs 370.75 crore for the quarter ended March 2024 (Q4FY2024). The
bank has posted 10% growth in net interest income (NII), while the core fee
income of the bank surge 65% in Q4FY2024. The Net Interest Margin (NIM) of the
bank dipped to 5.10% in Q4FY2024 compared to 6.10% in the corresponding quarter
of previous year.
The bank has
completed merger of Fincare Small Finance Bank effective from 1 April 2024. The
bottomline of the bank in Q4FY2024 was impacted due to expenses amounting to Rs
76.80 crore including stamp duty has been incurred in relation to the
acquisition and merger of Fincare Bank and the same has been disclosed as
exceptional item.
On business front, the bank as has posted 25% growth
in business with strong 25% surge in loan book. The asset quality of the bank improved
in Q4FY2024. Bank has maintained steady credit to deposit ratio at 84.9% at end
March 2024 from 85.3% at end March 2023. The CASA ratio of the bank has improved
on sequential basis to 33.4% at end March 2024.
Asset quality improves: The bank has improved asset
quality in Q4FY2024.
The fresh slippages of
loans stood at Rs 296 crore in Q4FY2024 compared with 403 crore in previous
quarter and Rs 191 crore in the corresponding quarter last year.
The recoveries and upgradations
of NPAs was at Rs 399 crore in Q4FY2024.
The standard
restructured loan book of the bank net of provisions stood at Rs 356 crore end
March 2024.
Provision coverage ratio
was steady at 76% at end March 2024 compared to 72% a quarter ago and 75% a
year ago.
The capital adequacy
ratio of the bank stood at 20.1% with Tier I ratio at 18.8% at end March 2024.
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Asset Quality
Indicators: AU Small Finance Bank
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Mar-24
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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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Variation
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QoQ
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YoY
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Gross NPA (Rs Crore)
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1237.40
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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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-8
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26
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Net NPA (Rs Crore)
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400.99
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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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-12
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64
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% Gross NPA
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1.67
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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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-31
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1
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% Net NPA
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0.55
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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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-13
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13
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% PCR
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76.00
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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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400
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100
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% CRAR - Basel III
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20.06
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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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-76
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-353
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% CRAR - Tier I -
Basel III
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18.80
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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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-70
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-300
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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 25% YoY to Rs 161181 crore end March 2024, driven by 25% surge in
advances to Rs 73999 crore. Deposits rose 26% to Rs 87182 crore at end March
2024.
CASA deposits ratio rises:
The CASA deposits of the
bank increased 9% YoY to Rs 29126 crore at end March 2024. The current account
deposits increased 45% to Rs 5338 crore, while saving account deposits
increased 4% to Rs 23788 crore end March 2024. The CASA ratio rose on
sequential basis to 33.4% at end March 2024 from 33.0% a quarter ago, while
declined from 38.4% at end March 2023. The term deposits have increased 36% to
Rs 58056 crore end March 2024.
Strong loan growth: Advances growth was
driven by retail loans rising 27% YoY to Rs 35119 crore at end March 2024, while
credit to agriculture increased 49% to Rs 5953 crore and MSME 18% to Rs 28021 crore
at end March 2024. The corporate credit has moved up 29% to Rs 4906 crore end March
2024.
Investment book of the bank jumped 35% YoY to Rs 27133 crore at end March 2024.
Margins improve: The bank has showed 71 bps
YoY jump in cost of deposits to 7.00%, while yield on advances declined 20 bps
YoY to 13.20% in Q4FY2024. Thus, the NIM has fell 100 bps YoY, while also
declined 40 bps qoq to 5.10%
Branch expansion: The bank has added 25 branches
and 187 ATMs in Q4FY2024, taking overall tally to 1074 branches and 682 ATM`s
end March 2024.
Book value of the bank stood at Rs 186.8
per share at end March 2024, while the adjusted book value (net of NNPA and 10%
of restructured advances) was Rs 180.2 per share at end March 2024.
Quarterly Performance
NII rises on strong loan
growth: Bank
has recorded 24% increase in the interest earned at Rs 2829.50 crore, while
interest expenses increased 41% to Rs 1492.47 crore in Q4FY2024. NII improved 10%
to Rs 1337.03 crore in the quarter ended March 2024.
Healthy growth in the
core fee income: Bank has posted strong 65% growth in core fee income to Rs 548 crore,
while the treasury income surged 600% to Rs 7 crore, leading to 67% jump in the
overall non-interest income to Rs 555.62 crore in the quarter ended March 2024.
Expenses ratio rises: The operating expenses
of the bank increased 26% to Rs 1228.49 crore, as other expenses moved up 52% to
Rs 749.42 crore, while employee expenses increased 15% to Rs 555.87 crore in
Q4FY2024. Cost to income ratio was nearly stable at 64.9% in Q4FY2024 compared
with 63.1% in Q4FY2023, helping the Operating Profit to increase 16% to Rs 664.16
crore.
Provisions and
contingencies jump: The bank has showed 224% surge in provisions to Rs 132.51 crore. The
loan loss provisions galloped 161% to Rs 120 crore, while standard asset
provisions rebounded to Rs 13 crore.
Effective tax rate
declined to 15.8% in Q4FY2024 from 19.9% in Q4FY2023. Net Profit declined 13% YoY
to Rs 370.75 crore during quarter ended March 2024.
Commenting
on the performance, Sanjay Agarwal, Founder, MD & CEO, of AU Small Finance
Bank, said, "India`s economic landscape is surging forward, with GDP
growth projected to be among the highest globally. This robust growth fuels
optimism for businesses and entrepreneurs like me. With a robust GDP,
controlled inflation, and a continuously improving regulatory environment,
India`s macro picture paints a bright future for its economy. I`m really
excited about the opportunity and scope for execution that this growth provides
to an institution like AU. This period of growth also coincides with our own
philosophy of building AU forever. The first phase of our forever journey, that
is AU @ 2027, is the foundational period of first 10 years of our banking
journey.
Our
performance in the current quarter has remained absolutely on track with
deposit growth outpacing advances growth, margins broadly remaining within our
guided range and asset quality continuing to be robust. I am happy that our
merger with Fincare has received all regulatory approvals in record time, and
we are now operating as a merged entity. We now have 2,383 physical touchpoints
across India and apart from a brick-and-mortar presence, we have a body and
soul present in all these locations, giving us an extensive network which
ensures we`re closer to our customers than ever before and fast forwards our
distribution build-out by many years”.
Financial Performance
FY2024:
Bank has posted 7% increase
in net profit to Rs 1534.72 crore in the year ended March 2024 (FY2024). The
net interest income increased 17% to Rs 5157.08 crore, while non-interest
income moved up 69% to Rs 1745.89 crore, pushing up net total income by 26% to
Rs 6902.97 crore in FY2024. The operating expenses increased 28% to Rs 4388.00 crore,
while provision and contingencies galloped 183% to Rs 438.74 crore. Profit before
tax increased 11% to Rs 2076.23 crore in FY2024. The cost-to-income ratio rose to
63.6% in FY2024 compared to 63.0% in FY2023. An effective tax rate declined to 22.4%
in FY2024 compared to 23.4% in FY2023. The net profit has increased 7% to Rs 1534.72
crore in FY2024.
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AU Small Finance Bank: Results
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Particulars
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2403 (3)
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2303 (3)
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Var %
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2403 (12)
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2303 (12)
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Var %
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Interest Earned
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2829.50
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2274.85
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24
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10554.71
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8205.41
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29
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Interest Expended
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1492.47
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1061.65
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41
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5397.63
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3780.13
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43
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Net Interest Income
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1337.03
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1213.20
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10
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5157.08
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4425.28
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17
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Other Income
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555.62
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333.06
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67
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1745.89
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1034.46
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69
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Net Total Income
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1892.65
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1546.26
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22
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6902.97
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5459.74
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26
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Operating Expenses
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1228.49
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975.35
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26
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4388.00
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3440.27
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28
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Operating Profits
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664.16
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570.91
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16
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2514.97
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2019.47
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25
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Provisions &
Contingencies
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132.51
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40.88
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224
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438.74
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154.84
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183
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Profit Before Tax
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531.65
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530.03
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0
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2076.23
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1864.63
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11
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EO
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-76.80
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0.00
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-
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-76.80
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0.00
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-
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PBT after EO
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454.85
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530.03
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-14
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1999.43
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1864.63
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7
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Provision for tax
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84.10
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105.41
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-20
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464.71
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436.71
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6
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PAT
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370.75
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424.62
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-13
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1534.72
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1427.92
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7
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EPS*(Rs)
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26.03
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25.38
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23.82
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21.34
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Adj BV (Rs)
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180.23
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159.43
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180.23
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159.43
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*
Annualized on equity of Rs 669.16 crore pre-merger with Fincare SFB at end
March 2024. Face Value: Rs 10, Figures in Rs crore
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Source: Capitaline Corporate
Database
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