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AU Small Finance Bank reported 23% on year growth in its net profit to Rs 425 crore for the quarter ended March on the back of healthy growth in net interest income.
Net interest income – the difference between interest earned and interest expanded – was Rs 1213 crore for the Q4, up 30% from the same period of the previous financial year.
The bank reported a net interest margin of 6.1% during the quarter as against 6.2% in the previous quarter and 6.3% in the year ago period.
Operating expenses also grew 27% year-on-year to Rs 975 crore. Other operating expenses for the quarter grew by 40% to Rs 493 crore and 59% for FY23 to 1647 crore.
“Other operating expenses have grown 59% YoY primarily due to variable expenses on higher business volumes as well as continued investment in credit card business,” the bank said.
Bank continues to make investments (Rs 156 Crore in Q4’FY23 and Rs 506 Crore in FY23 vs Rs 100 Crore in Q4’FY22 and Rs 257 Crore in FY22) towards digital initiatives viz credit cards/QR/Video Banking (70%), distribution expansion (19%) and brand campaign (11%).
The bank’s total balance sheet grew by 31% YoY to Rs 90,216 crore while deposits grew by 32% to Rs 69365 crore. The gross advances of the bank was Rs 59,158 crore as on March 31, 2023 as compared to Rs 46,789 crore a year ago.
Asset quality improved with GNPA falling to 1.66% of gross advances as compared to 1.98% a year ago. Net NPA stood at 0.42% of net advances in Mar 2023 vs 0.50% in Mar 2022.
