AU Small Finance Bank's loans grow 42 % YoY in Q1 on positive sentiment

AU SFB said that the retail-to-wholesale loan ratio stood at about 90:10 as of June 2022, versus around 88:12 as of March 31, 2022

Country’s largest small finance lender, AU Small Finance Bank (SFB) posted a 42 per cent year-on-year (YoY) growth in credit to Rs 49,366 crore in the first quarter ended June 2022 (Q1FY23).

Its gross advances stood at nearly Rs 34,687 crore at end of June 2021 (Q1FY22). Sequentially, advances expanded by six per cent from Rs 46,789 crore at end of March 2022 (Q4FY22).

AU SFB, in a BSE filing, said that the retail-to-wholesale loan ratio stood at about 90:10 as of June 2022, versus around 88:12 as of March 31, 2022.

The loan disbursements grew 345 per cent YoY in the first quarter of FY23 to Rs 8,445 crore from Rs 1,896 crore in the Q1FY22. Sequentially, however, disbursements were down 18 per cent from Rs 10,295 crore in the quarter ended March 31, 2022.

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"In Q1FY23, despite rising inflation and interest rate hardening, positive sentiment on the ground coupled with resilient consumption supported economic activity and income generation", the lender said.

As for liabilities, the Janipur-based lender’s total deposits grew by 48 per cent YoY to Rs 54,631 trillion from Rs 37,014 trillion as of June 30, 2021. Sequentially, deposits were up four per cent from Rs 52,585 crore as of March 31, 2022.

The reversal in the interest rate cycle saw the incremental cost of funds going up but was well compensated by a simultaneous increase in the disbursement yields during the quarter. The incremental cost of funds rose to 5.7 per cent in Q1FY23 from 5.4 per cent a year ago and 5.3 per in Q4FY22.

The share of low-cost deposits, or current account savings account (CASA), in total deposits improved to 39 per cent at the end of Q1FY23, from 26 per cent in Q1FY22.