Q3 2025 AU Small Finance Bank Ltd Earnings Call Transcript
Key Points
- AU Small Finance Bank Ltd (NSE:AUBANK) reported a 15% year-to-date growth in total deposits, outperforming the banking system and private sector peers.
- The bank's Retail Secured Assets book, which forms 67% of the total loan portfolio, showed a strong growth of 14% year-to-date, with asset quality remaining stable.
- The Commercial Banking segment grew by 22% year-to-date, with expectations to grow over 30% for the full year, contributing significantly to the bank's liability franchise.
- The bank maintained a strong focus on cost efficiency, achieving a cost-to-income ratio of 54% in Q3, with expectations to finish the year at 57% to 58%.
- AU Small Finance Bank Ltd (NSE:AUBANK) has integrated over 100 urban deposit branches from Fincare, enhancing its distribution network and productivity potential.
- The bank experienced a slowdown in economic activity post-October, impacting overall credit demand and leading to cautious underwriting.
- There was a 3% outflow in CASA deposits due to withdrawals from certain government accounts, affecting the bank's deposit growth.
- The MFI segment faced challenges with elevated slippages and high credit costs, resulting in a 10% decline in MFI GLP year-to-date.
- The credit card business underperformed due to issues with digital underwriting and higher reliance on card-to-card sourcing, leading to a 9% decline in the outstanding book quarter-on-quarter.
- Net interest margin declined by 23 bps from 6.1% in Q2 to 5.9% in Q3, impacted by higher cost of funds and adverse loan mix.
Ladies and gentlemen, good day, and welcome to the AU Small Finance Bank Q3 FY25 earnings conference call. (Operator Instructions) Please note that this conference is being recorded. I now hand the conference over to Mr. Prince Tiwari, Head of Investor Relations. Thank you, and over to you, sir.
Thank you, Sagar. Good evening, everyone, and welcome to AU Small Finance Bank's earnings call for the third quarter of FY25. If we haven't spoken earlier, then Happy New Year to all of you. We thank you, all, for joining the call today on this Friday evening.
On today's call, we have our Founder, MD, and CEO, Mr. Sanjay Agarwal; our Executive Director and Deputy CEO, Mr. Uttam Tibrewal; our Deputy CEO, Mr. Rajeev Yadav; and other senior members of the management, to answer any questions that you may have.
We will start today's call with a 20 to 25 minute opening remarks by Mr. Gaurav Jain, President, Finance and Strategy, highlighting the bank's performance, positioning, and
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