AU Small Finance Bank Reports Q2 Profit Surge Amid Rising NPA Concerns

AU Small Finance Bank's net profit rose by 42% to Rs 571 crore for Q2 of 2024, buoyed by improved interest income. Total income reached Rs 4,549 crore. Despite profit growth, asset quality declined with an increase in gross and net NPAs, and capital adequacy decreased. The bank applied for transition to Universal Bank.

AU Small Finance Bank has experienced a significant 42% increase in net profit, reaching Rs 571 crore for the second quarter of 2024, driven by enhanced interest income.

Compared to the previous year, when the Jaipur-based bank recorded a net profit of Rs 402 crore, this marks a substantial improvement.

Total income for the quarter soared to Rs 4,549 crore, up from Rs 2,957 crore in the same period last year, according to the bank's regulatory filing.

The net interest income saw a robust 58% growth, hitting Rs 1,974 crore during July to September, compared to Rs 1,249 crore a year prior.

The net interest margin rose to 6.1%, from 5.5% at the end of September 2023.

Nevertheless, the bank's asset quality suffered, with gross non-performing assets increasing to 1.98% of gross advances from 1.91% in the previous year.

Net NPAs climbed to 0.75%, up from 0.60% during the past year.

Furthermore, the Capital Adequacy Ratio dropped to 18.51%, from 22.4% the previous year.

In a strategic move, the bank has filed an application with the Reserve Bank of India to transition to a Universal Bank, as revealed in a statement issued on September 3, 2024.

(With inputs from agencies.)