AU Bank's Q1 profit rises 37% YoY to ₹796cr
What's the story
AU Small Finance Bank has reported a whopping 37% year-on-year (YoY) increase in its net profit for the first quarter of FY27. The bank's net profit stood at ₹796 crore, up from ₹581 crore in the same period last year. The impressive growth was fueled by a strong performance in net interest income (NII) and a sharp decline in provisions.
Financial performance
NII grows by 32% YoY to ₹2,696cr
The bank's NII, which is the difference between interest earned and paid, grew by 32% YoY to ₹2,696 crore from ₹2,045 crore last year. This indicates strong growth in the bank's core lending business.
The operating profit also witnessed a growth of 9.4% YoY to ₹1,435 crore from ₹1,312 crore in the same period last year.
Asset management
Gross NPAs stood at 2.10%
The bank's asset quality remained stable on a sequential basis, despite a slight increase in non-performing assets (NPAs).
Gross NPAs stood at 2.10% at the end of Q1 FY27, up from 2.03% in the previous quarter.
However, net NPAs came in at 0.76%, slightly higher than the 0.74% reported in March quarter.
Financial stability
Provisions declined to ₹371cr
The bank reported a significant reduction in credit costs with provisions declining to ₹371 crore during the quarter from ₹533 crore in the same period last year.
However, total deposits grew 24% YoY and 3% quarter-on-quarter (QoQ) to ₹1,57,727 crore during Q1 FY27.
CASA deposits also increased by 22% YoY and 5% QoQ while the CASA ratio stood at an impressive 29%.
Business growth
Loan disbursements witnessed robust growth
The bank's gross loan portfolio grew by 23% YoY and 3% QoQ to ₹1,44,250 crore. Loan disbursements also witnessed robust growth of around 42% YoY during the quarter.
On the cost front, the bank's cost-to-assets ratio stood at 4%, compared to 3.9% in Q1 FY26.
Annualized credit cost improved to 0.8% from 1.4% in Q1 FY26, indicating lower credit costs during this period.