AU Small Finance Bank posted a strong financial performance for the October-December quarter of FY25, with a net profit of ₹528.45 crore, marking a 41% year-on-year (YoY) increase from ₹375.25 crore in the same period last year. However, on a sequential basis, the net profit saw a dip of 7.5% compared to ₹571.2 crore reported in the previous quarter (Q2).
Key Highlights
- The bank’s NII surged 53% YoY to ₹2,022.5 crore in Q3 FY25.
- Total income rose 49% YoY to ₹4,731.89 crore, compared to ₹3,178.05 crore in Q3 FY24.
- Gross Non-Performing Assets (NPA) increased to 2.31% in Q3, up from 1.98% in Q2.
- Net NPA margin stood at 0.91%, higher than 0.75% in the previous quarter.
The bank attributed the sequential drop in profits to macroeconomic factors, including subdued economic momentum in the latter part of Q3 and liquidity deficits that exerted pressure on interest rates and deposit growth.
The bank’s microfinance portfolio faced elevated slippages during Q2 and Q3, a trend expected to persist in Q4. Additionally, credit costs in the credit card segment remain high as the bank refines its digital underwriting and risk management frameworks to ensure sustainable growth in these areas.
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“After some festive momentum, the economic environment in Q3 was relatively subdued. Liquidity deficits and rising interest rates presented challenges, but the overall outlook remains better than H1 FY25,” the bank said in its press release.
AU Small Finance Bank continues to focus on strengthening its operational framework and balancing risk as it navigates industry-wide corrections in unsecured advances, particularly in the microfinance segment.
