Wednesday, April 26, 2023

AU Bank Deposits Grow 32% YoY, Advances Grows 26% YoY And Full Year Profit Grows 26% YoY To Rs 1,428 Crore


* Bank declares Dividend of Rs. 1/- per equity share (10% of face value) for FY23 

* Profitability – Net profit for Q4’FY23 was up 23% YoY at Rs 425 Cr; full year FY23 PAT at Rs 1,428 Cr; RoA for Q4’FY23/FY23 at 2.0%/1.8% and RoE at 15.8%/15.4% 

* RBI approves re-appointment of  Chairman Mr. R V Verma for his residual tenure till Jan’24 

* MD & CEO Mr. Sanjay Agarwal for the period of 3 years 

* ED, Mr. Uttam Tibrewal for the period of 3 years  

* RBI grants the Bank Authorised Dealer Category – I (AD Cat-I) license for offering Forex and cross-border trade related services 

* Dividend - The Board has further recommended a dividend of Rs. 1/- per equity share (10% of face value) for the year ended March 2023 

* Addition of Independent Directors - Bank further strengthened and expanded its Board with the addition of 3 independent directors during the year taking the total *

* Board strength to 10 directors with 8 of them being independent directors including 2 women directors   

* Deposits grows 32% YoY to Rs 69,365 Cr; CASA deposits grow by 36% YoY to reach Rs 26,660 Cr; CASA ratio at 38.4% and CASA + Retail deposit at 69%  

* Balance Sheet crosses Rs 90,000 Cr    

* Asset quality improved further Gross NPA reduced by 15 bps to 1.66% and net NPA at 0.42% 

* Provisioning strengthened further with Provision Coverage Ratio (PCR) at 75%; PCR including technical write-off at 78%   

* Contingency provision now at Rs 90 Cr; floating provision maintained at Rs 41 Cr and provisions for standard restructured assets at Rs 116 Cr 

* Bank opened 108 new touchpoints in FY23, taking the total physical network to 1,027 touchpoints across 21 States and 3 Union Territories 

The Board of Directors of AU Small Finance Bank Limited at its meeting held today, approved the financial results for the quarter and year ended March 31, 2023. 

Executive Summary 

The Bank has navigated the first 6 years of its Banking operations relatively well despite the macro headwinds like Demonetization, GST implementation, NBFC & private Banking events and COVID-19 pandemic and during this period, the Bank has delivered a consistent performance with Deposits growing at a CAGR of 54%, Advances growing at a CAGR of 35% and Balance Sheet growing at a CAGR of 37% respectively for the period from FY18 to FY23.   

FY23 was a year of uncertain macro and global headwinds with tighter liquidity and higher inflation leading to significant increase in interest rates and stronger competition for deposits. Amidst this challenging and unsettled environment, the Bank continued to deliver a consistent and strong performance across parameters while continuing to progress on the journey of building a standardized, scalable and sustainable banking franchise across deposits, assets and digital banking. 

1.    Financial Highlights 

Full year FY2023 highlights  


Bank’s total balance sheet grew by 31% YoY to Rs  90,216 Crore  

Deposits grew by 32% YoY to Rs  69,365 Cr; CASA at 38.4% as against 37.3% as on 31st Mar’22 

Cost of Funds increased by 1 bps YoY to 5.96%   

88% of loan book is retail in nature and 92% of loan book is secured 

Ratio of fixed rate to floating rate loans has decreased to 66:34, from 74:26 as on Mar’22 


Total income stood at Rs  9,240 Crore, up 34% YoY; NII at Rs 4,425 Crore, up 37% YoY 

Net profit for the full year FY23 is at Rs 1,428 Crore, up 26% YoY 

NIM for FY23 was maintained at 6.1% (including assigned/securitized book)  

ROA stood at 1.8% and ROE at 15.4% even as we continue to invest significantly in people, digital, branding, products and distribution to build a future ready bank 

Asset quality  

Bank’s Asset quality improved significantly with GNPA at 1.66% in Mar’23 vs 1.98% in Mar’22 

Net NPA stood at 0.42% of net advances in Mar’23 vs 0.50% in Mar’22 

Provision coverage ratio remain at 75% whereas PCR inclusive of technical write-off is at 78%  

Apart from provision of Rs  695 Crore against GNPA pool, Bank has, additionally, maintained following provision buffer 

Provision against restructured book at Rs  116 Crore (17% of restructured book)  

Contingency provision of Rs  90 Crore (0.15% of advances) 

Floating provision of Rs  41 Crore (0.07% of advances) 

Standard provisions of Rs  191 Crore (0.33% of advances) 

Capital Adequacy 

Bank remains well capitalized with  

Total CRAR at 23.6% as against minimum requirement 15%  

Tier-I capital ratio of 21.8% as against minimum requirement 7.5%  

Q4’FY23 financial results  

Net profit for the quarter rose by 23% YoY to Rs  425 Crore  

Net Interest Margin (NIM) for Q4’FY23 at 6.1% vs. 6.3% in Q4’FY22 

ROA for Q4’FY23 stood at 2.0% and ROE at 15.8%  

Cost of funds for Q4’FY23 increased by 32 bps to 6.29% vs. 5.97% in Q3’FY23 

2.    Digital and Payment business 

The Bank’s digital properties like AU 0101, Video Banking, Credit cards, UPI QR etc. continue to see strong momentum 

The Bank has 5 Lacs+ live Credit cards and installed ~10 Lacs QR codes till 31-March’23 

Of the total credit card issued, over 26% of customers are first time users of Credit card and 64% of the customers are new to Bank 

2.9 Lac+ Savings Account opened digitally via Video Banking till date with total deposit relationship of Rs 1,150+ Cr 

3.    Dividend for FY23 

The Board of Directors of the Bank recommended dividend of Rs. 1/- per equity shares (10% of face value) from the net profit for the year ended 31st March 2023, subject to approval of shareholders. The dividend on equity shares will be paid/dispatched after the same is approved by the shareholders at the ensuing Annual General Meeting (AGM) of the Bank.    

4.    Addition to the Board 

Our focus on governance remains our key priority and the Bank appointed 3 independent directors during the year with Ms. Kavita Venugopal joining as an independent director in Q4’FY23 taking the total Board strength to 10 directors with 8 of them being Independent Directors including 2 women director. 

5.    Other key updates 

The Bank has expanded its presence to 108 new touchpoints in the form of Asset Centres, Bank Branches, Bank Outlet (BO) and Smart BC and its network is spread across 1,027 touchpoints as on Mar 31, 2023 

CARE Ratings has re-affirmed long-term credit rating of the Bank to CARE AA/Stable. The rating on Short-term Instruments (Certificate of Deposits) of the Bank has been reaffirmed at CARE A1+  

Key awards during the quarter: 

AU Bank is adjudged as a “Great Place To Work” for the 3rd consecutive year; among the Top 25 BFSI Brands by “Great Place To Work” (GPTW) 

AU Bank won “India’s Best Small Finance Bank” award at BFSI & FinTech Awards 2023 by Dun & Bradstreet    

AU Bank won “Retail Banker International Asia Trailblazer Award” for 2022-23  in the  category of “Excellence in Talent Management”  

AU Bank received “Silver Shield for Excellence in Financial Reporting” at the ICAI awards 2021-22 in the private sector Bank category  

AU Bank rated “AA” by MSCI ESG Ratings for our ESG initiatives   

Commenting on the performance, Mr. Sanjay Agarwal, MD & CEO, AU Small Finance Bank said, "The Bank has delivered another quarter and another year of consistent performance across all parameters despite the challenges around inflation, liquidity leading to higher interest rates. Amidst a difficult market, we have managed to grow our deposit book while keeping our CASA ratio stable and making our deposits more granular and retail.  Our asset quality has also improved further this year with net NPA coming down to 0.4%. Our focus on governance remains our top priority and with the addition of 3 new independent directors during the year, the total Board strength has now reached to 10 directors with 8 of them being Independent Directors including 2 women directors. As a Bank, we are positioning ourselves to take advantage of the India opportunity over the next decade – be it products, technology, distribution or manpower. We continue to lay foundation of building a sustainable and well governed, pan-India Bank with a generational mindset having practices and processes which are Standardised, Scalable and Sustainable. 

As AU Bank completes 6th year as a Small Finance Bank and 28 years as an Institution, it gives me immense satisfaction and pride as a founder and an entrepreneur and receiving the Authorized Dealer Category – I license (AD-I) on our anniversary date of 19th April was the perfect gift that any Institution could have wished for. I would like to express my gratitude to the Government, RBI and other regulators for their support and guidance and to our Investors, customers, employees, and other stakeholders for their unwavering trust in AU. To express gratitude to our shareholders the Board has recommended a dividend of Rs. 1/- per equity share (10% of face value) for FY23”. 

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