AU Small Finance Bank Q1 Results: Net profits jumps by 44% to ₹387 crore, asset quality improves

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₹387 crore from ₹268 crore posted during the corresponding quarter in the last fiscal. The jump in net profits was driven by growth in interest income which rose to ₹2,458 crore in Q1FY24 over ₹1,820 crore in Q1FY23. AU Small Finance Bank reported that its total income in the Q1 of the present fiscal year increased to ₹2,773 crore, as compared to ₹1,979 crore in the corresponding period of the previous year, according to a regulatory filing.

In Q1FY24, the bank witnessed a 28% rise in Net Interest Income (NII) for the bank, reaching ₹1,246 crore compared to ₹976 crore during the same period in the previous fiscal. However, during this period, the net interest margin experienced a slight decline, dropping to 5.7% from 5.9% in the same quarter a year earlier. Despite the first quarter being considered a seasonally weaker period for banking, the bank achieved growth in its assets and deposits.

Moreover, its profitability exhibited significant improvement, showing a remarkable 44% increase on an annual basis. This impressive performance was mainly supported by the substantial growth in Net Interest Income (NII) of 28%. The bank's asset quality demonstrated improvement, with a decline in gross non-performing assets (NPAs) to 1.76% of gross advances by the end of the June quarter, down from 1.96% in the corresponding period a year ago.

Similarly, the net NPAs or bad loans also decreased to 0.55%, compared to 0.56% in the same year-ago period. The provision coverage ratio, which includes technical write-off and floating provision, remained stable at 73%, indicating a healthy level of provisioning to cover potential losses. Furthermore, the Capital Adequacy Ratio (CAR) of the bank saw a notable increase, reaching 21.46% during