AU Small Finance Bank Q2 Results: Profit Rises 42%, NII grows 58% YoY

AU Small Finance Bank announced its Q2 results for the quarter ended September 30, 2024, posting a 42% increase in net profit to ₹571 crore, compared to ₹402 crore in the same period last year. The bank's total income surged to ₹4,549 crore, a 54% growth over ₹2,957 crore recorded in Q2FY24.

However, the bank saw a modest increase in its Gross Non-Performing Assets (GNPA), which rose to 1.98% from 1.91% in the same period last year. Likewise, Net Non-Performing Assets (NNPA) rose to 0.75% from 0.60% during the same period.

Quick Insights:

• Revenue: ₹4,549 crore, up by 54% YoY.
• Net Profit: ₹571 crore, increased by 42% compared to last year.
• Segment Performance: The gross loan portfolio exceeded ₹1 lakh crore, and total deposits also crossed ₹1 lakh crore.
• Management's Take: Strong growth driven by improvement in interest income. Net interest income grew 58% to ₹1,974 crore. Outlook remains positive. 
• Stock Reaction: On Thursday AU Small Finance Bank share price rose by 5%, reaching an intraday high of ₹682.90.

Management Commentary:

Sanjay Agarwal, MD & CEO of AU Small Finance Bank, emphasized the bank's consistent performance despite challenges like inflation, elections, and abnormal weather. He noted that The bank aims to execute its AU@2027 strategy by prioritizing margin optimization, sustaining fee income growth, and carefully managing operating expenses.

He added, “We have started to see early signs of pickup in economic activity over the last 3-4 weeks and remain optimistic of an improved operating environment in H2 as consumer confidence, rural demand and private investment picks up. Amidst this macro backdrop, AU SFB delivered another quarter of consistent performance across most of the parameters with sustainable growth in our assets and profitability. Our double-digit deposit growth on a QoQ basis with stable Cost of Funds remains the highlight of the quarter.”

Stock Market Reaction:

The company announced its Q2 results on Wednesday, 23 October 2024. The following day, 
Shares surged 5% to reach an intraday high of ₹682.90 on the BSE. However, at around 11:30 am, the stock was trading at ₹649.35. The stock closed at ₹651.50 on Wednesday. 
About AU Small Finance Bank & Upcoming News:

AU Small Finance Bank is a commercial small finance bank that serves over 10.9 million customers through its 2,408 touch points across twenty one states and four Union Territories. In September 2024, the bank applied to the Reserve Bank of India for voluntary transition to a universal bank. This move is aimed to enhance its brand and drive the next phase of growth, positioning it as a "forever bank." The bank's shareholders' equity has now surpassed ₹16,000 crore.