AU Small Finance Bank applies for transition to Universal Bank; shares rise

AU Small Finance Bank has submitted an application to the RBI for a voluntary transition from a Small Finance Bank to Universal Bank

AU Small Finance Bank shares rose 2.3 per cent and registered an intraday high of Rs 692 on BSE on Wednesday, September 4. The buying interest sparked after the bank submitted an application to the Reserve Bank of India (RBI) to seek approval for the voluntary transition from a Small Finance Bank to a Universal Bank.

As of 1:40 PM, shares of AU Small Finance Bank were up 2.03 per cent or Rs 13.7 to Rs 688.15 per share. The market capitalisation of the company stood at Rs 51,148.14 crore. By comparison, the BSE Sensex was down 272 points or 0.33 per cent.

 

"We wish to inform that the Bank has submitted an application to the Reserve Bank of India (RBI) to seek approval for the voluntary transition from a Small Finance Bank to Universal Bank today i.e. on September 03, 2024," the filing read.

Through a filing on July 25, 2024, the small finance bank's board had approved to apply to the RBI for the transition from a Small Finance Bank to Universal Bank.

Further, the board has constituted a Committee of Directors to vet the application for submission to the RBI.

AU Small Finance Bank Q1FY25

AU Small Finance Bank reported a 30 per cent jump in its net profit to Rs 502 crore for the first quarter ended June 30 (Q1FY25) as against Rs 387-crore profit in the year-ago period.

During the quarter, the bank's total income increased to Rs 4,315 crore as against Rs 2,773 crore a year ago. Its interest income grew to Rs 3,769 crore during the period under review from Rs 2,458 crore in the corresponding quarter a year ago.

The small finance bank's asset quality marginally worsened with gross non-performing assets (NPAs) rising to 1.78 per cent of gross advances as of June 30, 2024, from 1.76 per cent by the end of the first quarter of the previous fiscal.

AU Small Finance Bank share price history

In the past one year, shares of AU Small Finance Bank have lost 59 per cent against Sensex's rise of 26.2 per cent.