AU Bank Clocks 94% Growth in Disbursements, Total Income up 69%; PAT up 24% Y-o-Y



  • Stellar 61% y-o-y growth in Gross Loan AUM led by Disbursements nearly doubling in Q1FY19.

  • Marked improvement in Asset Quality; Gross NPA comes at 2.17% as compared to 2.98% in Q1FY18. Q1FY19 Net NPA were at 1.38% as against 2.15% in Q1FY18

  • Deposits touched approximately INR 10,000 Crs mark; Grew more than 10 times Y-o-Y and 26% sequentially. More than 75% of the incremental CASA Accounts opened in Q1FY19, were New to AU Bank.

  • Profit After Tax (PAT) was INR 77 crore, Up 24% y-o-y

  • Q1FY19 ROA & ROE at 1.55% & 13.2% respectively

  • Equity Investment of INR approximately 1000 Crores from Temasek Holdings 






Bank’s Gross Loan AUM reached INR 17,322 crore; clocking a growth of 61% y-o-y. This was led by a strong all-round growth in disbursements which jumped nearly twofold at INR 2,885 Crores in Q1FY19 over same quarter last year, despite Q1 generally being a seasonally leaner quarter.


Retail Assets continue to dominate with approximately 82% of the overall Gross Loan AUM. Vehicle Loan disbursements were up more than 100%, likewise MSME Loans grew approximately 71% over Q1FY18. Moreover, Bank continued to gain strong traction in new segment of Agri SME Loans, Gold Loans, 2 Wheeler Loans and Housing Loans. Collectively, this caused the Retail Assets AUM to clock a growth of approximately 54% y-o-y.


Alike Retail Disbursements, Bank’s SME & Mid Corporate Disbursements also grew approximately 90% led by a strong 119% disbursement growth in Business Banking Segment. Disbursements to NBFC segments grew by 91% over Q1FY18.


Total Deposits stood at INR 9,999 crore as at Jun 30, 2018 including Certificate of Deposits of INR 1,928 crore. Branch Deposits expanded more than 10 times over same period last year and over 26% from Q4FY18. CASA ratio (excluding Certificates of Deposits) came in at 28% as on Jun 30, 2018. Deposit to Advances Ratio further climbed up to approximately 66%.                 


Last quarter we tied up with CMS as their banking partner for 1000 ATMs proposed to set up at 992 Atal Seva Kendra and 8 Mobile ATMs across gram panchayats in Rajasthan. AU Bank also got empanelled with India’s largest insurer LIC for offering its branch banking products at LIC’s offices PAN India. Another important milestone was going live on Public Fund Management System (PFMS) application to manage public fund distribution.


Digital Bank

AU Bank launched two key applications in the quarter gone by. The Bank launched AU ABHI (for Android users) – The New Age Instant Digital Savings Bank Account; The Bank also Launched AU Business App – A simple but powerful app for employee lead referrals and fulfillment. Besides that, Corporate Internet Banking was made live for all the business segment customers. AU Bank implemented an API Gateway to allow digital integration and collaboration with external vendors and stakeholders.


Income, Expense and Profitability

Bank’s Total Income in Q1FY19 grew over 2/3rd and stood at INR 703 crore. Net Interest Income for the quarter was INR 286 Crore, up 56% over Q1FY18. NII (%) came in at 5.8% and other income was 2.1%. Other income for the quarter was up  approximately 87% in Q1FY19. Both collectively helped record a surged in Total Income to INR 703 Crore in Q1FY19.


Bank’s Total Operating Expenses grew in line with strong growth in disbursement and came in at INR 237 Crores. Other Operating Expenses came in at INR 97 Crores and cost-to-income Ratio for the quarter came in at 60.9% for Q1FY19.


Profitability & Return Ratios

The Bank’s Pre-Provisioning Operating Profit (PPOP) and PAT was INR 152 crore and INR 77 crore respectively clocking in a growth of 22% and 24% Y-o-Y respectively.


ROA and ROE for the Q1FY19 came in at 1.55% and 13.2% respectively. Current quarter ROA was marginally lower primarily on account of increased employee costs.


Asset Quality

Bank reported a stable asset quality in Q1FY19 amidst the high disbursement growth and GNPAs, historically been a tad higher both in Q1 and 1H of past few financial years. Bank reported Gross NPA of 2.17% as against 2.98% in Q1FY18. Similarly, the Net NPA of the Bank stood at INR 211 crore i.e. 1.38% as against 2.15% as on Jun 30, 2018. Provision Coverage Ratio (PCR) was 36.8% for the June quarter.


Investment By Temasek Holdings 

Towards the end of Q1FY19, Temasek Holdings Private Limited, via their indirect wholly-owned subsidiary Camas Investments Pte. Ltd., committed an equity investment of INR 1000 Crore in the Bank in a combination of Equity (30%) and Convertible Warrants (approximately 70%). This investment happens to be the largest primary equity capital raise done by the bank. Out of this, in Q1FY19, Temasek has invested INR 475 crores in combination of straight equity of INR 300 crores and Warrant Application Money of INR 175 crores. The remaining 75% Warrants Money i.e. INR 525 crores will be paid on conversion of Warrants into equity on or before 18 months.


The Equity Shares & Warrants are subject to a lock-in of 12 months from the date of issuance of Equity Shares & from conversion of Warrants into Equity. Upon conversion of Warrants, Temasek Holdings will have hold approximately 4.81% Equity stake in the Bank. The aforesaid investment has capitalized the bank for its growth requirements for next 18-24 months.


Capital Adequacy

Post the aforesaid fresh capital infusion, Bank’s Total Capital Adequacy Ratio came in at 20.7% and Tier – I CRAR of 20.1% for Q1FY19.


Commenting on the strong set of Q1FY19 results, Mr. Sanjay Agarwal, MD & CEO, AU Small Finance Bank, said, “We continue to differentiate and deliver a strong all round growth on the Banking Platform as seen through a robust growth of more than 60% in AUM, approximately 100% growth in Disbursements and Deposits touching 10000 Crore mark, with GNPA and NNPA tracking well and a 24% growth in PAT over the previous quarter. With the launch of AU ABHI A/c, AU Business App, PFMS Integration and roll out of Corporate Net Banking, we have further strengthened our digital capabilities and would continue to do so. In the medium term, we want to become Bank with Total Assets of USD 10 billion by FY22 and further reorient ourselves as a customer-centric Bank. The recent infusion of INR 1000 Crores from Temasek has got us well capitalized for the next two years and we remain motivated and excited to keep growing our banking franchise.”



AU Small Finance Bank was awarded as Rajasthan’s Best Brand Award in the quarter gone by.

Source: NV1

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