AU Small Finance Bank reports 44% YoY net profit increase in Q1’FY24

AU Small Finance Bank Limited recorded a significant increase in pre-provisioning operating profit (PPoP) for Q1’FY24 with a 39% year-on-year (YoY) growth, bringing it up to ₹546 Crore from ₹394 Crore in Q1’FY23.

The bank also reported a YoY net profit growth of 44%, reaching ₹387 Crore in Q1’FY24 from ₹268 Crore in the same quarter of the previous year. Net Interest Income (NII) followed a similar trend, showing a 28% YoY growth, reaching ₹1,246 Crore compared to ₹976 Crore in Q1’FY23.

The bank’s Net Interest Margin (NIM) for Q1’FY24 stood at 5.7% compared to 5.9% in Q1’FY23, while the Return on Asset (ROA) and Return on Equity (ROE) were 1.7% and 13.8%, respectively, despite ongoing significant investments in human resources, digitalization, branding, product development, and distribution expansion.

During the quarter, AU Small Finance Bank acquired 3.75 lakh customers, with 45% of the acquisitions coming through digital products and channels. Total credit cards reached 6.1 lakh, and deposits sourced via video banking surpassed ₹1,300 Crore.

The bank also reported gross advances up by 29% YoY to ₹63,635 Crore and a 27% YoY increase in total deposits to ₹69,315 Crore. AU Small Finance Bank’s CASA ratio stands at 35% while CASA+ Retail Term Deposit reached 68%. Total Capital Adequacy Ratio was 21.5%, and the Tier-1 ratio was 19.9%, excluding profits for the quarter.

AU Small Finance Bank’s MD & CEO, Sanjay Agarwal, commented on the results, saying, “The first quarter of FY24 saw improved macro environment with moderating inflation, narrowing current account deficit and rising foreign exchange reserves… 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.”