AU Small Finance Bank reported a net profit of ₹402 crore in the second quarter (Q2FY24), up 17 per cent year-on-year (y-o-y), against ₹343 crore in the year ago quarter.

The bottomline growth was aided by reasonable growth in net interest income and robust growth in other income.

Net interest income (difference between interest earned and interest expended) was up 15 per cent y-o-y at ₹1,249 crore (₹1,083 crore in the year-ago quarter).

Other income, processing fee, profit/loss on sale of investments (including provision for depreciation), non-fund based income such as commission earned from guarantees, selling of third party products, recovery from loans written off, income from dealing in priority sector lending certificates, etc., jumped 72 per cent y-o-y to ₹425 crore (₹247 crore).

Net interest margin (interest income - interest expense/total assets) declined to 5.5 per cent from 6.2 per cent a year ago.

Gross non-performing assets (GNPAs) increased to 1.91 per cent of gross advances as at September-end 2023 against 1.76 per cent as at June-end 2023. Net NPAs position nudged up to 0.60 per cent of net advances against 0.55 per cent.

The bank attributed the GNPA increase to low base effect as it securitised ₹2,922 crore of loan assets in this quarter.

Gross advances increased by 24 per cent y-o-y to ₹65,029 crore.

“Of the total advances, vehicle loan contributes 32 per cent and micro business loan, home loan as well as commercial banking loans contribute 29 per cent, 8 per cent and 23 per cent, respectively. 88 per cent of loan book is retail in nature and 91 per cent remains secured,” according to the bank’s statement.

Total deposits rose 30 per cent y-o-y to stand at ₹75,743 crore as at September-end 2023.

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