AU Small Finance Bank - Business Momentum Robust In Q4; Asset Quality Deteriorates Sequentially: Motilal Oswal
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Motilal Oswal Report
AU Small Finance Bank Ltd. reported a weak Q4 FY21, with earnings impacted by one-offs in the form of higher interest reversals and increase in opex, led by employee stock ownership plan related expenses.
However, business momentum was robust, with retail deposit mix improving further.
Gross non-performing asset/ net non-performing asset increased to 4.3%/2.2%, led by tagging of customers who are less than 90 days past due and paying, but was once NPA during prior quarters.
However, collection efficiency and customer activation rate moved higher than pre-Covid-19 levels.
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