AU Small Finance Bank Q4 FY25 Business Update: Deposits and Advances Surge

AU Small Finance Bank Q4 FY25 Business Update

Shares of AU Small Finance Bank surged nearly 5 percent in intra-day trading on April 3, driven by the lender's robust business update for Q4 FY25. Investors responded positively to the bank's steady growth in deposits and advances, indicating its resilience amidst evolving macroeconomic conditions.

Deposit and Advance Growth

AU Small Finance Bank posted a strong operational performance for Q4 FY25, with total deposits rising to ₹1,24,270 crore, reflecting a 10.7 percent sequential increase from ₹1,12,260 crore in December 2024. On an annual basis, deposits saw a significant jump of 27.2 percent from ₹97,704 crore as of April 1, 2024, following its merger with Fincare SFB. CASA deposits also witnessed an uptick, growing 5.4 percent QoQ to ₹36,250 crore, although the CASA ratio declined slightly to 29.2 percent from 30.6 percent in the prior quarter.

Lending Performance

Gross advances climbed 7.7 percent QoQ to ₹1,08,780 crore from ₹1,00,989 crore in the previous quarter, reflecting strong credit demand. Including securitised and assigned portfolios along with IBPC, the bank's gross loan portfolio expanded 6.2 percent QoQ to ₹1,15,710 crore. On a year-on-year basis, the gross loan book recorded a healthy growth of 19.9 percent from ₹96,490 crore.

Capital Strengthening Initiatives

In a strategic move to strengthen its capital base, AU Small Finance Bank recently received board approval to issue unsecured, rated, listed, redeemable, subordinate, non-convertible lower tier II bonds worth up to ₹1,500 crore. These bonds, which qualify as tier II capital, will be issued via private placement through the electronic bidding platform (EBP) and will be listed on the wholesale debt market segment of BSE Limited.

Stock Performance and Market Reaction

The stock climbed as much as 4.65 percent to an intra-day high of ₹563.85. Despite the rally, AU Small Finance Bank remains over 25 percent below its 52-week high of ₹755, recorded in September 2024. The stock had hit a 52-week low of ₹479 in the previous month. Over the past year, AU SFB shares have declined 9 percent. In March, the banking stock fell 5.5 percent, following an almost 6 percent decline in February. However, January saw a 7.5 percent gain.

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