Profit After Tax at Rs. 79 crore, almost unchanged YoY despite impact of higher costs of bank transition
Gross AUM of over Rs. 13,400 crore, up 38%, driven by 82% retail loans
Opened over 300,000 CASA accounts, mobilized over ~ Rs. 3,700 crore of deposits during 9M FY18
Received by ‘Scheduled Bank’ status during the quarter
Ramping up new product launches – rolling out housing loans shortly
January 31, 2018: AU SMALL FINANCE BANK LTD. [BSE: 540611; NSE: AUBANK], has announced its financial performance for the quarter and nine months ended December 31, 2017.
Summary of Business Performance in Q3FY18
Ø Total Income of Rs. 570 crore, up 61% Y-o-Y, partly led by growth in other operating income.
Ø Net Interest Income of Rs. 250 crore for Q3FY18, up 25% Y-o-Y.
Ø Profit After Tax remained almost unchanged at Rs. 79 core as against Rs. 83 crore in Q3FY17, despite 146% increase in operating expenses due to bank transitioning.
Ø Maintained robust loan growth – Gross AUM grew by 38% Y-o-Y to Rs.13, 415 crore led by growth in all segments of retail and wholesale banking operations. Retail loans now exceed Rs. 11,000 crore, comprising ~82% of loan book.
Ø Second consecutive quarter wherein disbursals grew in excess of Rs. 2,500 crore. Witnessed steady growth across all segments of retail assets.
Ø Newly introduced products ramping up well – ~1,800 Gold Loans and 200 Consumer Durable Loans disbursed in Q3FY18
Ø Strong traction in deposits mobilization; Deposits nearly doubled over Q2FY18 and stood at Rs. 3,716 crore; driven partly also by ‘Scheduled Bank’ status, rates and product features. Over 300,000 CASA have been opened as a bank, maintained CASA ratio of 37%.
Ø Improved Asset Quality – GNPA at 2.8% (vs. 3.1% as on Sep 30, 2017) and NNPA of 1.9% (vs. 2.1% as on Sep 30, 2017).
Ø Q3FY18 Cost to Income Ratio marginally rose to ~57.1% compared to Q2FY18; expect gradual decline on the back of growing operations and improving operational efficiency.
Ø ROA (9M annualized) marginally better over Q2FY18 at 1.8%; likewise RoE (9M annualized) rose to 13.3%.
Ø Well Capitalized with CAR of 20.6% and Tier-I CAR of 19.7% as on December 31, 2017.
Ø ~89% deposit customers are “New to AU Bank”.
Ø Leveraging AU distribution strength; ramping up cross sell of life insurance, general insurance and mutual fund products.
Ø Made significant progress in expanding basket of products within banking operations:
o Initiated expansion via Business Correspondent partner tie-up
o TAB adoption crossed 90% for individual saving accounts; more than 124,000 accounts on Tab in last quarter; 97% accounts opened in STP mode
o Other Digital initiatives – launched Mobile Banking App on Android; IMPS made live on Internet Banking
o Ramping up new product launches – rolling out home loans shortly
Commenting on Q3FY18 financial and operating performance, Mr. Sanjay Agarwal, MD & CEO, AU Small Finance Bank said, “Q3 was the second full quarter of our operations as a bank, and I am happy to report that we continue to make significant progress on every key parameter in line with our objective to create a strong, profitable and sustainable retail banking franchise with optimal investments in people, technology and processes. We are increasing disbursements in traditional areas while also expanding our portfolio of products, which allow greater cross-sell within our community of customers. Incrementally, deposit mobilization is driving down the cost of funds, which is further enabled by our recently-gained status of a scheduled commercial bank. At the same time, we are closely monitoring our risk profile and are focused on managing stress in the loan book”.
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