AU Small Finance Bank posts 15% rise in net profit to Rs 203 cr for June quarter

AU Small Finance Bank (SFB) on Friday reported a 15 per cent increase in its net profit to Rs 203 crore for the first quarter ended June 30.

The bank had reported a net profit of Rs 177 crore in the year-ago quarter.

Its total income during April-June 2021 rose 11 per cent to Rs 1,538 crore, compared with Rs 1,410 crore in the year-ago period, AU Small Finance Bank said in a regulatory filing.

Net interest income jumped 40 per cent to Rs 724 crore from Rs 516 crore, aided by reduction in the cost of funds by 88 basis points and assets under management (AUM) growth, the bank said.

The profit after tax was higher by 15 per cent even as the bank prudently increased contingency buffer, it said.

Demand is gradually improving for loans, it said adding that deposits continue to scale up driven by increasing brand awareness, branch expansion and improved digital offering.

The bank’s disbursements during the quarter were impacted due to the second wave of the pandemic, but were up 75 per cent from a year ago, partly due to the base effect and gradual recovery seen in June.

Gross non-performing assets (NPAs) reduced sequentially to Rs 1,496 crore (4.3 per cent of gross advances) from Rs 1,503 crore, it added.

The bank said it accelerated other provisions by 331 per cent to Rs 177 crore during the quarter, to strengthen the balance sheet and be better prepared for any unforeseen adverse event.

Restructured loans (standard) stood at Rs 1,265 crore as of June 30, 2021.

Shares of AU Small Finance Bank on Friday closed at Rs 1,250 apiece on the BSE, up 0.74 per cent from the previous close.