Despite an increase in the net interest income, the net profit of AU Small Finance Bank fell 2% on year to Rs 561 crore for the quarter ended September. The net interest income grew by 9% on year to Rs 2,144 crore in the reporting quarter.
The other income of the bank grew 12% on year, mainly driven by higher fee income and third-party product distribution, it said. The net interest margin of the small finance bank increased by 5 basis points on a sequential basis to 5.5% in the reporting quarter. The margin expansion was primarily led by a sharp reduction of 25 bps in cost of funds in the reporting quarter.
Overall gross loan book of the bank stood at Rs 1.23 lakh crore registering a year-on-year growth of 17%. Excluding the unsecured businesses, the gross loan book was up 22% on year. The bank’s unsecured business which consists of microfinance, credit card and personal loans, de-grew by 23.3% on year.
Total deposits stood at Rs 1.33 lakh crore, up 20.8% on year. The share of current account and savings account deposits stood at 29.4%.
“We expect the broader economic environment to improve in the second half of the year supported by revival in consumer demand led by GST cuts, above average monsoons supporting rural revival, and Government’s continued thrust on capex,” the bank said in a release.
In terms of asset quality, the gross non-performing asset ratio declined marginally to 2.41% as compared to 2.47% a quarter ago whereas the net NPA ratio was stable at 0.88%. Credit cost increased 29% on year but declined 10% on quarter to Rs 481 crore.
The net provisions of the bank increased by 29% on year to Rs 481 crore, but down 10% on quarter. The provision coverage ratio stood at 84%.
On the National Stock Exchange, the shares of AU Small Finance Bank closed 0.2% higher at Rs 799.95 on Friday.
