AU Bank delivers strong operating performance - Net profit grows by 44% YoY to ₹ 387 Crore

Mumbai/Jaipur, July 22, 2023: The Board of Directors of AU Small Finance Bank Limited at its meeting held today, approved the financial results for the quarter ended June 30, 2023.

Performance at a glance:
Profitability
•       The Bank’s pre-provisioning operating profit (PPoP) for Q1’FY24 grew 39% YoY to ₹ 546 Crore compared to ₹ 394 Crore in Q1’FY23. The net profit at ₹ 387 Crore in Q1’FY24 grew 44% YoY compared to ₹ 268 Crore in Q1’FY23
•       The Bank’s Net Interest Income (NII) grew 28% YoY to ₹ 1,246 Crore compared to ₹ 976 Crore during Q1’FY23.
•       Net Interest Margin (NIM) for Q1’FY24 stood at 5.7% compared to 5.9% in Q1’FY23
•       The Return on Asset (ROA) and Return on Equity (ROE) stood at 1.7% and 13.8% respectively even as we continue to invest significantly in people, digital, branding, products and distribution to build a future ready bank
 
Deposits
•       The total deposits grew 27% YoY to ₹ 69,315 Crore compared to ₹ 54,631 Crore in Q1’FY23
•       The current account deposits increased by 47% YoY in Q1’FY24 whereas savings account deposits saw an increase of 11% YoY 
•       The Bank had a Liquidity Coverage Ratio (LCR) of 151% as on March 31, 2023, and thus the focus in Q1’FY24 was to consume this excess liquidity instead of growing high-cost deposits. Accordingly, in June’23, the Bank reduced its peak deposit rates by 25 basis points across savings and retail term deposits. The retail term deposits saw a growth of 8% on QoQ basis
 
Advances
•       The Bank’s Gross advances grew by 29% YoY to ₹ 63,635 Crore in Q1’FY24 compared to ₹ 49,349 Crore in Q1’FY23
•       Of the total advances, Vehicle Loan contributes 33% and Secured Business Loans (SBL), Home Loan as well as Commercial Banking Loans contribute 30%, 7% and 21% respectively
 
 
Commenting on the performance, Sanjay Agarwal, MD & CEO, AU Small Finance Bank said, “The first quarter of FY24 saw improved macro environment with moderating inflation, narrowing current account deficit and rising foreign exchange reserves. The rural economy also continued to recover and the monsoon is likely to support the credit demand in rural and semi-urban areas. I am quite optimistic about the Indian economy and the banking sector looks poised for sustained period of growth.
 

Amidst this macro backdrop, AU SFB delivered another quarter of consistent performance across parameters with sustainable growth in our assets, deposits and profitability despite some impact on our margins due to deposit repricing and negative carry from excess liquidity buffers. The strong performance in this quarter is a testimony to our highly competent and empowered team and our business model which allows us to capture customer imagination, which in turn allows us to service our customers in an innovative manner.
 

Like every other quarter, we have continued to strive to improve the digital adoption by our customers and 45% of our new customer acquisition has been via digital products and channels like ‘AU 0101', which is among the top-rated banking apps in the country.
 

Going forward, we will continue to focus on sustainable growth, aiming to improve our balance sheet size while penetrating deeper into rural India, where a significant unbanked population resides.”