AU Small Finance Bank reported a 105 per cent year-on-year (yoy) jump in fourth quarter net profit on the back of robust growth in net interest income and other income, and a decline in loan loss provisions.

The Jaipur-headquartered bank’s board recommended a bonus issue of 1 equity share for every 1 equity share held to mark completion of five years of banking operations.

The bank’s board also recommended a dividend of ₹1 per share (pre-bonus issue) for FY22.

In the reporting quarter ended March 31, 2022, AU SFB’s net profit soared to ₹346 crore (₹169 crore in the year ago period).

Net interest income (difference between interest earned and interest expended) was up 43 per cent yoy at ₹937 crore (₹656 crore), aided by reduction in cost of funds by about 88 basis points yoy and AUM (assets under management) growth of 27 per cent yoy.

Other income, which includes processing fee, profit/ loss on sale of investments (including provision for depreciation), recovery from loans written off, income from dealing in priority sector lending certificates, etc, rose 26 per cent yoy to ₹311 crore (₹247 crore).

Net interest margin (NIM) improved to 6.3 per cent in the reporting quarter against 5.7 per cent in the year ago quarter.

Loan loss provisions

Loan loss provisions declined 78 per cent to ₹115 crore (₹517 crore). The bank said it has created floating provisions of ₹41 crore in the current quarter to further strengthen the balance sheet.

Gross non-performing assets (GNPAs) declined to 1.98 per cent of gross advances as at March-end 2022 against 4.25 per end as at March-end 2021.

Net NPAs declined to 0.50 per cent of net advances as at March-end 2022 against 2.18 per end as at March-end 2021.

Deposits were up 46 per cent yoy to stand at ₹52,585 crore as at March-end 2022 (₹35,979 crore as at March-end 2021).

Low-cost current account, savings account (CASA) deposits accounted for 37 per cent of total deposits as at March-end 2022 against 23 per cent as at March-end 2021.

Advances rose 33 per cent yoy to stand at ₹46,095 crore (₹34,609 crore). The bank said disbursements at ₹10,295 crore in the reporting quarter was its highest ever quarterly achievement, recording a 44 per cent yoy growth.

Meanwhile, AU SFB’s Board approved increase in authorised capital from ₹350 crore to ₹1,200 crore.

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