Credit and finance for MSMEs: AU Small Finance Bank on Thursday announced its third quarter (October-December FY23) results with the highest-ever quarterly net profit of Rs 393 crore, growing by 30 per cent year-on-year (YoY) and 15 per cent quarter-on-quarter (QoQ). The company’s profitability remained resilient with RoE (Return on Equity) at 15.2 per cent for the quarter. RoE essentially refers to a company’s profitability by measuring shareholders’ earnings from their investments made in the company.
“Q3 was another quarter of strong and consistent performance across all key parameters supported by sustained underlying business momentum and strong capital base. Despite the challenging environment around inflation and liquidity, we were able to maintain margins, deliver growth in loan market share, improve asset quality, focus on productivity while achieving our highest-ever quarterly profits,” said Sanjay Agarwal, MD & CEO, AU Small Finance Bank in a statement.
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Starting its banking operations in April 2017, the bank had 1,015 touchpoints in 22 States and two union territories as of December 7, 2022. It also provides secured business loans for MSMEs beginning with Rs 2 lakh and interest rate up to 24 per cent, according to details available on the company’s website.
AU’s gross advances grew by 7 per cent QoQ to Rs 56,335 crore from Rs 52,452 crore in Q2 with 90 per cent of the loan book in retail and 93 per cent of loans being secured.
In terms of the bank’s asset quality, the gross non-performing assets (GNPAs) improved from 1.90 per cent during the September quarter to 1.81 per cent in the December quarter of the current fiscal. On the other hand, the Net NPAs were stable at 0.51 per cent while restructured loans declined to 1.4 per cent, the company said.
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Moreover, the bank’s provision coverage ratio (PCR), which is about the ratio of provisioning to GNPAs and indicates the extent of funds a bank has kept aside to cover loan losses, stood at 72 per cent during Q3 vis-a-vis 71 per cent during Q2. Including technical write-offs, the PCR was at 75 per cent. Technical write-offs are the removal of accounts from the NPA category by the bank while it tries to recover the amount involved.
Au Small Finance Bank reported balance sheet size crossing Rs 80,000-crore mark in Q3 from Rs 77,878 crore in Q2 while the bank’s net worth reached Rs 10,540 crore, growth of 5x in around 5 years and from over Rs 10,000 crore in Q2. During the quarter, the bank opened 42 new touchpoints.
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