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Revenue
₹28,29,49,960 Cr
verified against source
Revenue YoY
—
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 a strong Q4 FY24 with gross loan portfolio growth of 28% YoY to ~INR 82,000 crore and deposit growth of 26% YoY crossing INR 87,000 crore. Asset quality improved with gross NPA down 26 bps QoQ to 1.47%. The merger with Fincare Small Finance Bank was completed in record time, adding 1.1 crore customers and 2,383 touchpoints. Management aims to defend 1.6% ROA in FY25 by shifting disbursement mix toward high-yield assets (targeting 75% of disbursements from >3% ROA products), improving branch profitability, and moderating credit card issuance. Key risks include continued NIM pressure from elevated interest rates and potential regulatory changes in microfinance pricing.
Colored figures show movement against the previous available record.
Guidance to track
- Management expects to grow the balance sheet by around 25% per annum over the next three years, consistent with historical growth rates.
- The bank aims to defend a return on assets of 1.6% in FY25, despite cost of funds expected to rise by 40-45 bps, by leveraging the Fincare merger and shifting to high-yield assets.
- Credit card issuance will be moderated to around 600,000 cards per year, similar to FY24 levels, to control upfront acquisition costs.
- Management guided for a steady-state credit cost of approximately 1.0-1.1% on advances (70-75 bps on total assets), including the MFI portfolio.
Risks flagged
- Management expects cost of funds to increase by 40-45 bps in FY25, which could compress NIMs further if not offset by yield improvements.
- Credit card business is not expected to be profitable for at least two years, with high credit costs (~6-6.5%) and potential regulatory changes adding uncertainty.
- An analyst raised the possibility of RBI imposing a yield cap on microfinance loans, which could impact the bank's strategy to grow MFI to 10% of the book.
- The merger with Fincare adds complexity; integration of systems, cultures, and branches must be seamless to realize synergies and avoid disruption.
Key quotes
- We want to defend 1.6 ROA next year too.
- The only factor outside our direct control is the elevated interest rate, and we don't anticipate a significant near-term reduction given the global headwinds.
- We will continue to grow our balance sheet by maybe around 25% annually over the next three years.
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