AU small finance bank reports Rs479 crore net profit in Q3

Today, AU Small Finance Bank reported a rise of over two and a half times in its net profit to Rs 479 crore for the third quarter ended December 2020. They posted a net profit of 190.19 crore for the corresponding quarter last year.

Other income rose by 14% to ₹184 crore in the quarter under review. The bank’s provisions rose to ₹283.62 crore in the third quarter this fiscal from ₹40.1 crore a year ago.

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The total net income during the October-December 2020 period also jumped 94% to Rs 1,297 crore from Rs 668 crore a year ago, The lender said in a release. Net interest income grew 25% to Rs 633 crore.

Gross non-performing assets stood at 1% of gross advances as on 31 December, 2020 compared to 1.9% as on 31 December, 2019. Net NPAs stood at 0.2% at the end of the third quarter compared to 1% a year ago.  The provision coverage ratio (PCR) stood at 76%.

“In the third quarter of the fiscal, AU Small Finance Bank restructured  251 crore (0.8% of gross advances), mainly in the bus, taxi (within wheels) and schools, apparels,” the bank said.

The bank said the strong performance has happened as growth has returned to normalcy. Because of the normalised environment and re-emergence of growth, the bank is moving ahead with an annual performance appraisal (increments) for 2019-20 for all employees in this quarter. The bonus has already been paid out in the third quarter of 2020-21, said the lender.

The bank, which expanded into 16 new locations including Bhubaneshwar, Hyderabad, Kolkata and Lucknow, said attractive merchant offers with larger partners like Amazon, Flipkart, Myntra, Swiggy, Zomato and Dominos led to higher customer engagement and balances build-up.

It also entered into partnerships with Care Health Insurance and ICICI Prudential Life Insurance as part of the enhanced third party product range.

Sanjay Agarwal, managing director and chief executive officer, AU Small Finance Bank, said, “I believe the worst is behind us, things are going to get better now with the public vaccination in horizon.” He added that the lender is working on various digital properties to create a holistic digital bank.

On the digital footprint, the lender said it is available on all channels such as UPI, FASTag, Bharat Bill Payment System (BBPS), and Aadhaar enabled Payment System (AePS).

Over 1.6 crore transactions worth about Rs 6,000 crore were executed in October-December 2020 through the UPI platform, and Rs 172 crore worth of payments executed using the AePS platform, AU SFB said.

The bank’s investment in the National Payments Corporation of India (NPCI) is to further augment the digital banking journey, it said. AU Bank also participated in the equity raising process of NPCI to the maximum permissible limit, the statement further read.

Shares of AU Small Finance Bank on Thursday closed at Rs 869.45 apiece on the BSE, up 1.18%.