AU Small Finance Bank expects credit growth of 27-28% for this FY - CEO

AU Small Finance Bank

26/04/2023 08:21

By Siddhi Nayak
       MUMBAI, April 26 (Reuters) - India's AU Small Finance
Bank  AUFI.NS  expects to grow its loan book by 27% to 28% in
this financial year, aided by high credit demand in the country,
its managing director and chief executive officer told Reuters
on Tuesday.
    "I expect that this kind of (credit) growth momentum is
sustainable in some times to come," Sanjay Agarwal, managing
director and chief executive officer said in a telephonic
interview. The bank is targeting a deposit growth of around 29%
to 30% in deposits for 2023-24, Agarwal added.
    AU Small Finance Bank's deposits grew 32% year-on-year,
while loans logged 26% growth in the fiscal year 2023, slower
than the 33% in the year before.
    The bank's growth in advances has been much higher than that
of the industry. Fortnightly bank credit growth of scheduled
commercial banks was at 15.7% as of April 7, latest data
released by the Reserve Bank of India (RBI) showed.
    Last week, a local media outlet had reported, citing
sources, that the RBI had asked the bank to temper growth in
advances last year.
    Agarwal said this was in "regular course" of interactions.
"They (RBI) will always advise us; that is their right. But it
is up to the board and it's executives to see what is there to
accept and what is there to appeal against," he added. 
   "The RBI has not singled out the bank," Agarwal further said.
    AU Small Finance Bank’s gross non-performing assets (NPA)
ratio was at 1.66% as on March-end as compared with 1.98% last
year. Net NPA ratio stood at 0.42% against 0.50% as on March
2022.
    The lender does not plan to raise any fresh capital for the
next 18 months and plans to add 100 new branches in the current
fiscal year.

 (Reporting by Siddhi Nayak; editing by Eileen Soreng)
 ((Siddhi.Nayak@thomsonreuters.com; +91 22 6921 7848;))