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Revenue
₹27,35,82,030 Cr
verified against source
Revenue YoY
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reported change
EBITDA
Pending
latest reported figure
Source
nse xbrl
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
AU Small Finance Bank reported Q3 FY24 results in line with expectations, with balance sheet crossing INR 100,000 crore and deposits growing 31% YoY to over INR 80,000 crore. Loan book (gross of securitization) crossed INR 75,000 crore. Net interest margin contracted 6 bps QoQ to 5.5% due to elevated cost of funds (up 20 bps QoQ). Credit cost normalized to 62 bps, with credit card book contributing 18 bps. Gross NPA rose 7 bps to 1.98% partly due to securitization and seasonal collection disruptions from state elections. Management emphasized deposit-led growth strategy and investments in credit cards, digital, and brand. Merger with Fincare received CCI approval; final RBI approval awaited. Guidance: NIM at lower end of 5.5% for FY24; credit card breakeven expected by FY25-end. Risk: Rising credit costs from unsecured books (credit card, MFI post-merger) could pressure profitability if not offset by higher yields.
Colored figures show movement against the previous available record.
Guidance to track
- Management guided that full-year NIM will be at the lower end of 5.5%, considering cost of funds pressure and securitization income recognition.
- Management expects credit card business to break even by the last quarter of FY25, as the book seasons and term book builds.
- Sanjay Agarwal guided that on-book loan growth will be around 26-27% by end of FY24, partly due to base effect.
- Operating expenses for credit cards, QR, and video banking will remain elevated with ~55-60% growth in these cost heads next year as well.
Risks flagged
- Credit card credit cost is currently ~6-6.5% annualized, higher than industry steady-state, and may not normalize until the book reaches larger scale.
- Cost of funds increased 78 bps in 9M FY24 and 20 bps QoQ; NIM contracted 6 bps QoQ to 5.5%. Further hikes could compress margins.
- Fincare merger adds MFI book with ~3% expected credit cost; integration and asset quality management remain key risks.
- 75% of credit cards issued to new-to-bank customers with average limit of INR 1.74 lakh, which could result in higher delinquencies as the book seasons.
Key quotes
- Our focus has been steady first on every parameter needed to build a sustainable and complete bank.
- I don't really have a choice in terms of the pace at which they are getting built up. If I want to build my liability franchise, then I need to offer these products.
- Give us time till 2027, have a slightly long-term view, because if you really want to build a retail franchise in India, you will need to do everything that is needed to be done.
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