AU Small Finance Bank advanced 3.46% to Rs 596.70 after the bank reported a 31.8% rise in net profit to Rs 267.87 crore on a 26.3% rise in total income to Rs 1,979.35 crore in Q1 FY23 compared to Q1 FY22.
Net interest income (NII) in the quarter jumped 35% year-on-year to Rs 976 crore, helped by broadly stable spreads and assets under management growth of 37% year-on-year. Net interest margin (NIM) was 5.9% in the first quarter of FY23.
The bank’s operating profit fell by 18.1% year-on-year to Rs 394.07 crore in the first quarter of FY23.
Provisions and contingencies totaled Rs 38.37 crore in the first quarter, down 81.4% year-on-year.
Pre-tax profit in Q1 FY23 stood at Rs 355.70 crore, up 29.5% from Rs 274.66 crore in Q1 FY22.
Gross NPAs amounted to Rs 970 crore in Q1 FY23 against Rs 1,496 crore in Q1 FY22 and Rs 924 crore in Q1 FY22.
Gross NPA as a percentage of gross advances was 1.96% in Q1 FY23 compared to 4.31% in Q1 FY22 and 1.98% in Q4 FY22.
Net NPA as a percentage of gross advances was 0.56% in Q1 FY23 compared to 2.26% in Q1 FY22 and 0.50% in Q4 FY22.
The provision coverage ratio (PCR) is 72% as of June 30, 2022 compared to 49% as of June 30, 2021. Including technical impairments, the PCR is 74%.
Apart from the provision of Rs 654 crore against the GNPA pool, the bank further maintained a provision against the restructured book at Rs 170 crore (16% of the restructured book), a contingency provision of Rs 144 crore (0.30 % of advances), a floating provision of Rs 41 crore (0.08% of advances) and a standard provision of Rs 147 crore (0.30% of advances).
The bank’s deposits increased by 48% year-on-year to Rs 54,631 crore and loan assets under management increased by 37% year-on-year to Rs 50,161 crore in the first quarter of the fiscal year 23.
The bank’s total CRAR was 19.4% against the minimum requirement of 15% and the Tier-I capital ratio was 18.4% against the minimum requirement of 7.5% as of June 30 2022.
Sanjay Agarwal, MD and CEO, AU Small Finance Bank, said: “I am very pleased with the progress we have made as a bank over the past 21 quarters, despite working in an unusually difficult environment. Our business model becomes more and more sustainable with each pass. quarter driven by our retail-focused branch banking franchise, well-positioned vertical assets with continued resilient asset quality, traction in our digital initiatives and continued focus on high governance standards.
The macroeconomic environment and geopolitical challenges have kept inflation levels high and interest rates are tightening. Although this has an impact on costs, we always strive to maintain our performance ratios. With a good monsoon and expected support from the festive season in the second half of the year, we remain cautiously optimistic for the year as a whole.
AU Small Finance Bank (AU Bank) is a regular commercial bank. As of June 30, 2022, the bank has established operations through 953 banking touchpoints.
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