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AU Small Finance Bank Joins Rs 50,000 Crore M-Cap Club as Share Hits New High

AU Small Finance Bank’s shares jumped after the CCI approved its merger with Fincare Small Finance Bank.

Shares of AU Small Finance Bank (AU Bank) rose 3% to hit an all-time high of Rs 754.8 in intraday trade on Thursday, marking its entry into the elite league of corporate entities with a market capitalisation above Rs 50,000 crore.

BSE data showed that the stock was up 2.8% at Rs 752.15 as of 12:11 pm, with a market capitalisation (m-cap) of Rs 50,154 crore.

The market price of AU SFB has risen 30% since April after the company posted its highest quarterly profit of Rs 425 crore in the March quarter, up 23% year-on-year. The bank posted a net profit of Rs 346 crore in the same period last year.

Meanwhile, banks’ asset quality has improved, with a gross NPA of around 1.6% in March 2023, compared to 1.98% in March 2022. On the other hand, net NPA accounted for 0.42% of net advances in March 2023, compared to 0.5% in 2023, in the same period last year.

For the full FY22-23 (FY23), AU Bank delivered strong results across all parameters – deposits up 32% y-o-y, advances up 26% y-o-y and full-year profit up 26% YoY to Rs 1,428 crore, driven by a 37% increase in net interest income year-on-year.

Recently, the Reserve Bank of India (RBI) approved the reappointment of MD & CEO Sanjay Agarwal and full-time director Uttam Tibrewal for the next 3 years (till 2026), removing a major outstanding issue, especially in the area of ​​risk /Compliance came to the fore last year after a slew of resignations. The bank is now awaiting guidelines from the Reserve Bank of India to apply for a universal banking licence.

Despite significant growth in the loan book, AU Bank continues to be well-capitalised with the help of regular capital injections through Qualified Institutional Placements (QIPs), most recently at Rs 2,000 crore in August 2022, and internally stable and healthy accrued profits.

AU Bank is a scheduled commercial bank and the largest small finance bank in the country. The bank has net assets of Rs 10,977 crore, a deposit base of Rs 69,365 crore, gross advances of Rs 59,158 crore and a balance sheet size of Rs 90,216 crore.

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