Latest news with #AUSmallFinanceBank
Yahoo
a day ago
- Business
- Yahoo
AU Small Finance Bank Ltd (NSE:AUBANK) Q1 2026 Earnings Call Highlights: Strong Deposit Growth ...
Release Date: July 19, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points AU Small Finance Bank Ltd (NSE:AUBANK) reported a strong growth in its deposit book, which increased by 31% year-on-year, significantly outpacing the system growth rate. The bank's loan portfolio grew by 18% year-on-year, driven by core secured segments such as retail secured assets and commercial banking assets. The wheels segment, a key product within retail secured assets, showed robust growth with a 26% year-on-year increase in its gross loan portfolio. The bank maintained a healthy liquidity position with an average Liquidity Coverage Ratio (LCR) of 123%, up 7% from the previous quarter. AU Small Finance Bank Ltd (NSE:AUBANK) achieved a profit after tax of INR 581 crores, marking a 16% increase from the previous year. Negative Points The bank experienced elevated credit costs, particularly in its unsecured segments, leading to a revision in its full-year credit cost expectations. There was a decline in net interest margin by 38 basis points, attributed to a reduction in asset yield and investment yield. The unsecured microfinance book faced challenges with asset quality and book de-growth, impacting the bank's overall performance. The bank's mortgage portfolio in the southern region showed signs of stress, with higher credit costs due to deterioration in asset quality. The credit card and personal loans business experienced elevated credit costs, with the bank acknowledging a peak in absolute terms this quarter. Q & A Highlights Warning! GuruFocus has detected 6 Warning Signs with NSE:AUBANK. Q: How does AU Small Finance Bank expect its Return on Assets (ROA) to settle in FY26 and FY27, considering the pressure on net interest margin and credit costs? A: The bank has not provided specific guidance for ROA in FY26 but reiterates its target of achieving a 1.8% ROA for FY27. The bank expects FY26 to be stronger than FY25, which had an ROA of around 1.4%, despite the current challenges. (Respondent: Unidentified_3) Q: Can you elaborate on the stress observed in the used commercial vehicle (CV) segment? Is it geographically specific or broad-based? A: The stress in the used CV segment is not geographically specific but is related to the segment itself, which constitutes about 6% of the total yield assets. The pressure began last year due to delayed CapEx and heavy rains, but corrective measures have been taken, and the book is performing well post-adjustments. (Respondent: Unidentified_5) Q: What has structurally changed in the secured retail credit cost, which has been running higher than historical levels? A: The bank acknowledges that businesses go through cycles, and the current economic pressures have led to elevated credit costs. However, the bank remains one of the strongest franchises in terms of collection and asset quality. The expectation is for credit costs to stabilize in the range of 75-80 basis points. (Respondent: Unidentified_6) Q: What led to the stress in the microfinance (MFI) and South-based mortgage portfolios, and how is the bank addressing it? A: The stress in the MFI segment was due to a drop in collection efficiency, which is now improving. The South-based mortgage book faced challenges due to team transitions and infrastructure issues, which are being addressed. The bank expects normalization in a couple of quarters. (Respondent: Unidentified_5) Q: What is the outlook for loan growth in FY26, given the stress in some segments? A: The bank aims to grow 2 to 2.5 times the nominal GDP, with growth driven by vehicle financing, commercial banking, and gold loans. The bank expects stabilization and growth in the microfinance segment from Q2 onwards. (Respondent: Unidentified_2) For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Economic Times
2 days ago
- Business
- Economic Times
AU Small Finance Bank shares slump 7% after Q1 margins shrink
Shares of AU Small Finance Bank fell as much as 7.3% on Monday to Rs 736.95 on the BSE after the lender reported a mixed set of earnings for the June quarter, with shrinking margins and deteriorating asset quality overshadowing a 16% rise in net profit. ADVERTISEMENT Net profit rose to Rs 581 crore for the April–June quarter, up from Rs 503 crore a year ago, driven by strong treasury gains. However, the bank's core lending performance showed strain, with net interest margin (NIM) narrowing by 38 basis points to 5.4%. 'Net interest margins have started to shrink as banks began to transmit the rate cuts,' the bank said in a stock exchange filing. Net interest income (NII), a key measure of a bank's profitability, grew 6% year-on-year to Rs 2,045 crore from Rs 1,921 quality weakened during the quarter, with the gross non-performing assets (GNPA) ratio rising to 2.47% from 1.78% a year earlier. This led to a sharp increase in provisions, which surged to Rs 533 crore from Rs 283 crore in the year-ago pressure on margins, the bank reported a robust 38% growth in pre-provision operating profit at Rs 1,312 crore compared to Rs 952 crore a year earlier. This was supported by a 59% jump in other income, which stood at Rs 811 crore. The bank booked Rs 289 crore in treasury gains during the quarter, significantly higher than Rs 40 crore in the same period last year. ADVERTISEMENT AU Bank's gross loan portfolio expanded 18% year-on-year to Rs 1.18 lakh crore, even as its unsecured segments, comprising microfinance and credit cards, saw a 23% decline. Total deposits grew 31% over the same period to Rs 1.28 lakh crore. ADVERTISEMENT Shares of AU Small Finance Bank have gained 3.9% so far in 2025. The stock is up 7.6% in the past six months, and over 1% in the last 12 months, though it has slipped 1% in the last the stock is trading below its 5-day, 10-day, 20-day, and 30-day simple moving averages, while holding above its 50-day, 100-day, 150-day, and 200-day SMAs. The Relative Strength Index (RSI) at 50.1 indicates neutral momentum. The Moving Average Convergence Divergence (MACD) is at 10.9, above the center line but below the signal line. ADVERTISEMENT Also read | RBL Bank Q1 Results: Net profit falls 46% YoY to Rs 200 crore; NII down 13% (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
&w=3840&q=100)
Business Standard
2 days ago
- Business
- Business Standard
Stock Market LIVE: Sensex gains 300 pts; Nifty above 25,000; HDFC Bank, ICICI Bank rise 2% each
Sensex Today | Stock Market LIVE on Monday, July 21, 2025: In the broader markets Nifty Midcap 100 and Smallcap 100 were down 0.17 per cent and 0.28 per cent respectively 10:42 AM Stock Market LIVE Updates: Analysts up HDFC Bank target as credit growth, NIM set to improve Stock Market LIVE Updates: "HDFC Bank posted a steady quarter with a slight earnings beat due to tax reversals. We tweak our earnings estimates and project HDFC Bank to deliver an FY27 return on asset (RoA) of 1.9 per cent and a return on equity (RoE) of 14.9 per cent," said analysts at Motilal Oswal Financial Services. They reiterate their 'Buy' rating on HDFC Bank stock with a higher target price of ₹2,300. READ MORE 10:05 AM Stock Market LIVE Updates: Sensex, Nifty climb in a sudden spike 9:49 AM Stock Market LIVE Updates: AU SFB slips 7% after posting Q1 results; brokerages suggest 'Reduce' Stock Market LIVE Updates: AU Small Finance Bank shares slipped 7.3 per cent, logging an intraday low at ₹736.4 per share on BSE. The selling pressure came after the bank's Q1 numbers came in weak. At 9:34 AM, AU Small Finance Bank pared gains and the share price was trading 7.2 per cent lower at ₹737.35 per share on the BSE. In comparison, the BSE Sensex was down 0.2 per cent at 81,653.42. READ MORE 9:30 AM Stock Market LIVE Updates: These 8 stocks to go ex-date on July 22; do you own any? Stock Market LIVE Updates: Voltamp Transformers, Happy Forgings, Hind Rectifiers, Menon Pistons, SIL Investments, Siyaram Silk Mills, Strides Pharma Science, and Wires & Fabriks SA shares are expected to remain in spotlight today following their announcements of dividend rewards for shareholders. The BSE data suggests that they are slated to trade as they will trade ex-date tomorrow, Tuesday, July 22, 2025. Notably, the ex-date is the day a stock begins trading without the entitlement to corporate benefits such as dividends or bonus shares. Thus, the investors must hold the stock before the ex-date to be eligible for these benefits. The record date, however, is when the companies determine the list of shareholders who qualify for the corporate action. READ MORE 9:20 AM Stock Market LIVE Updates: A glance at broader market Stock Market LIVE Updates: In the broader markets, Nifty Midcap 100 index fell 0.3 per cent and Nifty Smallcap 100 fell 0.2 per cent during early trade. 9:19 AM Stock Market LIVE Updates: Sensex heatmap Stock Market LIVE Updates: Among the Sensex constituents, Reliance Industries, Axis Bank, Mahindra & Mahindra, Titan and Adani Ports were the top losers. 9:18 AM Stock Market LIVE Updates: Nifty50 opens below 25,000 Stock Markets LIVE Updates: The NSE Nifty50 opened at 25,958, down by marginally 9.65 points from its previous close.
Time of India
2 days ago
- Business
- Time of India
AU Small Finance Bank shares slump 7% after Q1 margins shrink
Shares of AU Small Finance Bank fell as much as 7.3% on Monday to Rs 736.95 on the BSE after the lender reported a mixed set of earnings for the June quarter, with shrinking margins and deteriorating asset quality overshadowing a 16% rise in net profit. Net profit rose to Rs 581 crore for the April–June quarter, up from Rs 503 crore a year ago, driven by strong treasury gains. However, the bank's core lending performance showed strain, with net interest margin (NIM) narrowing by 38 basis points to 5.4%. Explore courses from Top Institutes in Select a Course Category Technology Cybersecurity Data Analytics MBA Project Management healthcare Data Science Finance Operations Management Management others Data Science Digital Marketing PGDM CXO Product Management Healthcare Degree Others Public Policy Design Thinking MCA Leadership Artificial Intelligence Skills you'll gain: Duration: 12 Weeks MIT xPRO CERT-MIT XPRO Building AI Prod India Starts on undefined Get Details 'Net interest margins have started to shrink as banks began to transmit the rate cuts,' the bank said in a stock exchange filing. Net interest income (NII), a key measure of a bank's profitability, grew 6% year-on-year to Rs 2,045 crore from Rs 1,921 crore. Asset quality weakened during the quarter, with the gross non-performing assets (GNPA) ratio rising to 2.47% from 1.78% a year earlier. This led to a sharp increase in provisions, which surged to Rs 533 crore from Rs 283 crore in the year-ago period. Despite pressure on margins, the bank reported a robust 38% growth in pre-provision operating profit at Rs 1,312 crore compared to Rs 952 crore a year earlier. This was supported by a 59% jump in other income, which stood at Rs 811 crore. The bank booked Rs 289 crore in treasury gains during the quarter, significantly higher than Rs 40 crore in the same period last year. AU Bank's gross loan portfolio expanded 18% year-on-year to Rs 1.18 lakh crore, even as its unsecured segments, comprising microfinance and credit cards, saw a 23% decline. Total deposits grew 31% over the same period to Rs 1.28 lakh crore. Stock performance and technical indicators Shares of AU Small Finance Bank have gained 3.9% so far in 2025. The stock is up 7.6% in the past six months, and over 1% in the last 12 months, though it has slipped 1% in the last month. Technically, the stock is trading below its 5-day, 10-day, 20-day, and 30-day simple moving averages, while holding above its 50-day, 100-day, 150-day, and 200-day SMAs. The Relative Strength Index (RSI) at 50.1 indicates neutral momentum. The Moving Average Convergence Divergence (MACD) is at 10.9, above the center line but below the signal line. Also read | RBL Bank Q1 Results: Net profit falls 46% YoY to Rs 200 crore; NII down 13% ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
&w=3840&q=100)
Business Standard
2 days ago
- Business
- Business Standard
AU SFB slips 7% after posting Q1 results; brokerages suggest 'Reduce'
AU Small Finance Bank shares slipped 7.3 per cent, logging an intraday low at ₹736.4 per share on BSE. The selling pressure came after the bank's Q1 numbers came in weak. At 9:34 AM, AU Small Finance Bank shares pared gains and was trading 7.2 per cent lower at ₹737.35 per share on the BSE. In comparison, the BSE Sensex was down 0.2 per cent at 81,653.42. The company's market capitalisation stood at ₹55,197.64 crore. The 52-week high of the stock was at ₹840.95 per share, and the 52-week low of the stock was at ₹479 per share. CATCH STOCK MARKET LATEST UPDATES LIVE Brokerages' view on AU Small Finance Bank Q1 results AU Small Finance Bank reported its June quarter (Q1FY26) results on Saturday. Post Q1, the brokerages have maintained a 'Reduce' rating on the stock owing to weak performance. Emkay Global Financial has maintained a 'Reduce' rating on the stock with a target of ₹725 per share on the backdrop of higher valuations (2.6x FY27E ABV) amid a weak core performance and persistent asset quality stress. It also trimmed the FY26-27E earnings by 2-3 per cent. AU Small Finance Bank reported weak core performance, said Emkay Global in its note, with margins declining sharply by 40 basis points (bps) quarter-on-quarter (Q-o-Q) to 5.4 per cent, although higher treasury gains and surprisingly lower non-staff opex, amid bidding for a Universal Banking license led to a 6 per cent profit after tax (PAT) beat, at ₹580 crore/1.5 per cent return on asset (RoA). Further, the asset under management (AUM) growth moderated to 17.9 per cent year-on-year (Y-o-Y)/1.7 per cent (Q-o-Q), largely due to a sharp decline (23 per cent Y-o-Y/7 per cent Q-o-Q) in Unsecured businesses (MFI and Credit Card). This, along with rising stress in the used HCV/SCV segments, Microfinance Institutions (MFI) and the South-based secured mortgage portfolio, led to a 19 bps increase in gross non-performing asset (GNPA) to 2.5 per cent, as also credit cost, the brokerage noted. Nuvama Institutional Equities has also iterated a 'Reduce' rating on AU Small Finance Bank with a revised target of ₹650 per share from ₹530. According to Nuvama, AU Small Finance reported a soft quarter in Q1FY26 with a miss on net interest margin (NIM) and higher-than-expected delinquencies driven by south-based mortgages and a delayed recovery in MFI. Credit cost on credit cards also remained elevated on a downsized book. How did AU Small Finance Bank perform in Q1? In Q1, the small finance bank posted a 16 per cent growth in net profit to ₹581 crore during the first quarter of this financial year. The Jaipur-based bank had earned a net profit of ₹503 crore in the same quarter of the previous fiscal year. Its total income rose to ₹5,189 crore during the June 2025 quarter from ₹4,278 crore in the same period of FY25. Interest earned by the bank improved to ₹4,378 crore compared to ₹3,769 crore in the June quarter of FY25. Meanwhile, net interest income rose to ₹2,045 crore during the quarter against ₹1,921 crore a year ago.
