AU Small Finance Bank’s net profit for Q2 FY23 rose 23 per cent y-o-y and 28 per cent q-o-q to ₹343 crore on the back of strong loan growth and improvement in the asset quality.

“The bank continued to make progress on all key parameters be it CASA deposit mobilisation, credit growth, acquisition and engagement in digital products, increase in profitability and margins or collection efficiencies and asset quality,” it said in a release.

Advances for the lender rose 44 per cent y-o-y and 6 per cent q-o-q to ₹52,452 crore as of September 30, of which 90 per cent were retail and 93 per cent were secured. The bank said it securitised assets worth ₹715 crore during the quarter to optimise borrowing costs.

Deposits were also up 49 per cent y-o-y on a low base, and up 7 per cent sequentially to ₹58,335 crore, of which low-cost CASA deposits comprised 42 per cent.

Other stats

The bank raised ₹2,500 crore in capital during the quarter, which took the capital adequacy ratio to 23.4 per cent of which tier-I capital was 21.3 per cent.

Gross NPA ratio improved slightly to 1.90 per cent from 1.96 per cent in the previous quarter and significantly from 3.16 per cent in the corresponding quarter of the last year.

AU Small Finance Bank said the priority is to optimise the cost of funds, consolidate the deposits franchise, preserve risk-adjusted yields, and grow at a steady pace, adding that it will continue to add capabilities around wealth, current account, SMF (small and marginal farmers) lending.