AU Small Finance Bank Q4 net doubles to Rs 346 cr on better margins

Net Interest Margin improves to 6.3% from 5.7% a year ago; NPAs decline at gross and net levels

AU Small Finance Bank’s net profit rose by 105 per cent to Rs 346 crore for the fourth quarter ended March 2022 (Q4FY22) on improvement in interest margins.

Its net profit for FY22 was up 88 per cent to Rs 1,130 crore from Rs 600 crore for FY21.

The board of directors has recommended a dividend of one rupee per equity share (10 per cent of face value) on pre-bonus share capital for FY22. The board also recommended a bonus issue of one equity share for every one equity share held. The firm's stock closed 3.71 per cent higher at Rs 1,416 per share in BSE.

AU Small Finance Bank’s net interest income for the Q4FY22 rose to Rs 937 crore from Rs 656 crore in Q4FY21. Its Net Interest Margin (NIM) improved to 6.3 per cent from 5.7 per cent in Q4FY21.

The lender's asset quality profile improved with gross non-performing assets (NPAs) declining to 2.0 per cent as against 4.3 per cent as on March 31, 2021. Net NPAs declined from 2.2 per cent in March 2021 0.5 per cent in March 2022. The provision coverage ratio for bad loans stood at 75 per cent against 50 per cent a year ago.

The Jaipur-based lender’s deposits grew 46 per cent year on year to Rs 52,585 crore at end of FY22, from Rs 35,979 crore a year ago. The share of low-cost money–current account and savings account (CASA)–rose to 37 per cent from 23 per cent a year ago. It witnessed a growth of 32 per cent YoY in its gross advances to Rs 46,789 Crore from Rs 35,356 crore.

The bank remains well capitalised with a capital adequacy ratio of 21 per cent at end of March 2022, as against 23.4 per cent a year ago. The capital adequacy is much higher than minimum requirement 15 per cent. The Tier-I capital ratio of 19.7 per cent (21.5 per cent in March 2021) against minimum requirement 7.5 per cent at end of March 2022.