AU Bank net profit jumps 44 pc to Rs 387 cr on higher advances

AU Bank net profit jumps 44 pc to Rs 387 cr on higher advances
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The Jaipur-based AU Small Finance Bank on Saturday reported a 44 per cent rise in net profit at Rs 387 crore in the June quarter helped by growth in interest income and higher loan sales.

Mumbai: The Jaipur-based AU Small Finance Bank on Saturday reported a 44 per cent rise in net profit at Rs 387 crore in the June quarter helped by growth in interest income and higher loan sales. Total income rose to Rs 2,773 crore from Rs 1,979 crore, while interest income improved to Rs 2,458 crore from Rs 1,820 crore. Net interest income increased by 28 per cent to Rs 1,246 crore from Rs 976 crore in the same quarter a year ago. However, the net interest margin declined to 5.7 per cent from 5.9 per cent in the same period a year ago.

Founder and chief executive Sanjay Agarwal told PTI from Jaipur that the fall was due to higher deposit pricing that the bank had to do to attract funds. "Going forward I see more pressure on this side even though I had lowered the rates for both savings and fixed deposits in the quarter. I see a war being unleashed by lenders on deposit mobilization going forward. I was forced to lower the rates as my cost of funds has jumped from 5.96 per cent to 6.58 per cent now.

So I see the margins coming down further to 5.5-5.7 per cent for the full fiscal," he said. On the credit card front, he said the book is Rs 1,000 crore across 6 lakh customers and the bank is adding 50,000 new card customers and we want to make this portfolio really big as there is absolutely no issue with the asset quality here. In fact, I see the book turning profitable from next fiscal. The bank said its advances grew 29 per cent to Rs 63,635 crore, and deposits grew 27 per cent to Rs 69,315 crore of which 35 per cent was Casa and 68 per cent term deposit. Despite Q1 being a seasonally weak quarter for banking, the bank saw growth across its assets and deposits with profitability growing by 44 per cent on an annual basis supported by a strong NII growth of 28 per cent.

The bank's asset quality showed improvement as gross non-performing assets declined to 1.76 per cent of gross advances at the end of the June quarter from 1.96 per cent a year ago. Similarly, net NPAs or bad loans declined to 0.55 per cent as against 0.56 per cent in the year-ago period. Provision coverage ratio remains at 73 per cent including technical write-off and floating provision, it said. Capital adequacy ratio increased to 21.46 per cent as compared to 19.36 per cent at the end of June 2022.

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