NIM pressure from rate cuts and deposit repricing lag
With 50 bps repo rate cut, 30% variable rate book will reprice down, while deposit costs may not fall as quickly, pressuring NIMs in H1 FY26.
AUBANK / Q4-FY25 / risks
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AU Small Finance Bank · Material risks, their source context, and severity in the latest available quarter.
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Material risks this quarter
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MFI stress from Anfin guardrails and seasonal slippages
Despite improving collection efficiency, the implementation of Anfin guardrails and typical Q1 seasonality could lead to elevated slippages in MFI.
Credit card turnaround may take 1-2 years
Management acknowledged that the credit card franchise will take 1-2 years to turn around, with breakeven expected only by FY27.
Home loan NPA inching up post-merger
Home loan NPA has risen above 1% due to transition issues from the Fincare merger, though management expects it to normalize.