AU Small Finance Bank: Healthy disbursements

Shares of AU Small Finance Bank cracked almost 4% on BSE on July 27, mainly on account of profit-booking indices by the concerns raised about the health of lenders in the Financial and Stability Report issued by the Reserve Bank of India (RBI).
The Jaipur-based micro lender was one of the beneficiary from the ongoing Unlocking process in the country as well as expectations of revival in rural economy.

This, coupled with strong earnings performance boosted the micro lenders valuations on the bourses.
On Thursday, Au Small Finance Bank registered a net profit of Rs 201 crore during June 2020 (Q1FY21) quarter, compared to Rs 190 crore in the corresponding period of the previous year. However, its profit excluding profit from the sale of equity shares of Avas Financiers, increased by 48% to Rs177cr compared to Rs177cr of Q1FY20.
Meanwhile, total income stood at Rs 1,409.91 crore during the quarter, higher from Rs 1,168.33 crore in the similar quarter of the previous year.
Notably, in the latest period, the bank disbursed Rs 1,181 crore, which includes disbursements under Targeted Long Term Repo Operations (TLTRO) 2.0 of Rs 246 crore.

Assets under management or AUM growth stood at 17% yoy, with retail AUM maintaining its dominance at 84%. Operating expenses declined by 6% yoy and 30% qoq due to low growth momentum. The bank now carries Rs 278 crore of COVID-19 related provisions which constitutes 1% of our total Gross Advances & 10% of Complete Moratorium book.
Full EMI recovery has also improved to 67% in the month of June from 53% in the month of April, which indicates that more and more customers are opting out of moratorium with each successive month. Overall Collection efficiency improved to 90% in the month of June from 54% in April. Average monthly collection efficiency from April 2019 to February 2020 was at 98%.

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