AU Small Finance Bank: Profits double as Board announces Bonus issue


Jaipur-based AU Small Finance Bank reported a 105% YoY surge in its profits, as the figure for the quarter ending in March 2022, stood at Rs 346 crores. 

To give you a brief, AU started in 1996 as AU Financiers and was founded by Sanjay Agarwal. The company started with vehicle finance. In the year 2000, it was registered as an NBFC. It then operated through the years and began expanding as it began offering MSME and Housing Loans and expanded into Gujarat, Goa, Punjab, and other states. 

In 2016, the company received approval from the RBI to transform into a Small Finance Bank. In 2017, it officially received the status of a 'Scheduled Bank', launched its IPO, and got featured in the list of Fortune India 500. Currently, the bank has 39 touchpoints throughout the country. 

The company had a profit of Rs 169 crores in the same quarter last year. The bank's total income soared 28.4% from Rs 1,540 crores to Rs 1,978 crores this year. The bank reduced its provisions and noticed an improvement in the business scenario. 

Its net interest margin improved from 5.7% to 6.3% while its cost of funds fell from 6.5% to 5.7%. 

Annually, the bank's income grew 21% to Rs 6,915 crores while its net interest income saw a growth of 37% to Rs 3,234 crores. 

It saw a significant improvement in asset quality as its Gross NPAs fell from 4.3% to 2% while its Net NPAs fell from 2.2% to 0.5%. Deposits in the bank crossed 50,000 crores as the figure stood at Rs 52,585 crores, up 46% YoY & 19% QoQ.

With such profitable results, the Board of the Bank announced a bonus shares issue of 1:1 and a dividend of Rs 1 per share (pre-bonus issue). 

"Our financial performance in the current quarter has been quite strong and we have used the headroom available, judiciously, to secure our future by tightening our provisioning policy, increasing our coverage ratio, creating floating provision, and expanding our board. This coupled with our investments in people, digital assets and brand-building have enabled us to build a customer-centric, future-ready bank,” said Sanjay Agarwal, MD, and CEO, AU Small Finance Bank.

The stock is trading well on the exchanges as it trades at around Rs 1,366 per share. 

Article by Aman Agarwal. 

This news piece is brought to you in association with jobaaj.com

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