Earnings Review
AU Small Fin Bk PAT up 30% on Fincare merger impact
This story was originally published at 20:10 IST on 25 July 2024
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--AU Small Finance Bank Apr-Jun NIM 6% vs 5.7% year ago
--Apr-Jun NII 19.21 bln rupees, up 54% on yr
--Board OKs applying to RBI for universal bk licence
--Apr-Jun provisions 3.19 bln rupees vs 329.80 mln
--Microfin contingency provision 170 mln rupee Jun 30
--Basel II capital adequacy ratio 20.11% Jun 30
--Apr-Jun total income 43.15 bln rupees vs 27.73 bln
--Net NPA ratio 0.63% Jun 30 vs 0.55% qtr ago
--Gross NPA ratio 1.78% Jun 30 vs 1.67% qtr ago
--Apr-Jun net profit 5.03 bln rupees vs 3.87 bln
--Apr-Jun net profit 5.03 bln rupees
By Kabir Sharma
MUMBAI – AU Small Finance Bank's net profit for Apr-Jun increased 30% on year to 5.03 bln rupees as the merger of Fincare Small Finance Bank with itself, which came into effect on Apr 1, pushed up the net interest income of the combined entity. The bottomline was a tad higher than brokerages' expectations of 4.98 bln rupees. "FY25 (Apr-Mar) numbers are on merged basis and throughout the release, prior period numbers may not be comparable," the bank said in a press release.
Fincare Small Finance Bank had reported a net profit of 970 mln rupees in Apr-Jun in the year ago period, whereas AU Small Finance had reported a bottomline of 3.87 bln rupees.
The bank's net interest income grew 54% on year and 44% on quarter to 19.21 bln rupees. Other income rose 73% on year to 5.46 bln rupees, driven by fee income, third-party product distribution, and credit cards. Advances growth remained strong with loan portfolio at 997.92 bln rupees, growing by 3.4% on quarter. The bank said most numbers are not comparable to previous years' numbers because Fincare Small Finance Bank merged into the bank on Apr 1.
Bank deposits stood at 972.90 bln rupees, up 12% on quarter and 40% on year.
Total income of the bank rose 55.6% on year to 43.15 bln rupees in Apr-Jun. Total expenses of the bank rose slightly lower at 49.4% to 33.27 bln rupees. Net interest margin of the bank was at 6.0% in Apr-Jun, up from 5.7% year ago. The bank expects slight moderation in the margins going ahead, it said in its investor presentation.
Gross non-performing asset ratio of the bank was at 1.78%, up 11 basis points on quarter. Net non-performing asset ratio of the bank was at 0.63%, up 8 bps on quarter. Provison coverage ratio of the bank was at 84% including the technical write-offs. The bank has also created a contingency buffer of 170 mln rupees on the microfinance portfolio, in line with the guidance of taking microfinance credit cost at 3%.
Provisions of the bank rose 868% on year to 3.19 bln rupees in Apr-Jun, weighing on the bottomline. The board of the bank also approved the application to the Reserve Bank of India for the bank's transition into a universal bank.
The Basel – II capital adequacy ratio of the bank was at 20.11% on Jun 30. Today, shares of the bank closed 4.2% lower at 631.65 rupees on the National Stock Exchange. End
Reported by Kabir Sharma
Edited by Akul Nishant Akhoury
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