AU Small Finance Bank (AU SFB) is planning to grow its advances at a compound annual growth rate (CAGR) of 25% in the next three years. “Our growth will be slower than the previous years because the merger has changed our base. Even with 25% CAGR, we will be able to double our balance sheet in three years,” MD and CEO Sanjay Agarwal told FE.The Jaipur-headquartered bank, which received its SFB licence in 2017, has grown its advances by over 30% annually before the merger. Now the management is content with a relatively slower growth.“We are aiming for a responsible and sustainable growth as our customer base has crossed 1 crore and the deposit base has reached around Rs 87,000 crore. So, the expectations of customers from the bank have increased,” he added.
The first 10 years are crucial for any new financial organisation, as the chances of mistakes are high during the initial years of operation, he said.The SFB’s gross advances grew by 25% y-o-y to Rs 73,999 crore as on March 31 and deposits reached Rs 87,182 crore, a growth of 26%.On the merger with Fincare SFB, Agarwal expects the integration of both entities to complete in 9-12 months. “We expect the integration of both entities to be completed in the next 9-12 months. All our branches have been rebranded as AU SFB,” he added. The merger, which is effective April 1, marks a significant milestone in the banking sector, creating an entity with a combined customer base of over 10 million, over 46,000 employees and a network of over 2,400 physical touchpoints with a balance sheet size of Rs1.25 trillion.
Q4 profit falls 12%The bank reported a 12% decline in net profit to Rs 370.73 crore in Q4, from Rs 424.6 crore a year ago. Net interest income rose 10% y-o-y to Rs1,337 crore while other income rose 66.8% to Rs555.6 crore. Provisions gained over three times by 224% y-o-y to Rs132.5 crore.In a bid to increase fee income, AU SFB on Tuesday launched an array of products, including Rupay credit card and ATM insurance. The offerings include two innovative credit cards: AU SPONT Rupay Credit Card and Secured Credit Card-NOMO, developed in tie-ups with NPCI and VISA, respectively. The NOMO Credit Card marks AU SFB’s debut into secured credit cards, backed by a fixed deposit.