AU Small Finance Bank (AUSFB) has reported significant growth in deposits for the fourth quarter of the financial year 2024-25, along with plans to bolster its capital base through Tier II Bond issuance.

Q4 Deposit Growth

According to the bank's latest regulatory filing, AUSFB witnessed a robust 10.7% quarter-on-quarter increase in total deposits, reaching ₹124,270.00 crore as of March 31, 2025. This marks a substantial 27.2% year-on-year growth from ₹97,704.00 crore reported on April 1, 2024, following the merger with Fincare SFB.

CASA Performance

The bank's Current Account Savings Account (CASA) deposits also showed positive momentum, rising by 5.4% quarter-on-quarter to ₹36,250.00 crore. However, the CASA ratio experienced a slight decline, settling at 29.2% compared to 30.6% in the previous quarter and 32.2% at the beginning of the financial year.

Loan Portfolio Expansion

AUSFB's gross advances grew by 7.7% quarter-on-quarter, reaching ₹108,780.00 crore. The gross loan portfolio, which includes securitized/assigned portfolio and IBPC (Inter-Bank Participation Certificate), stood at ₹115,710.00 crore, reflecting a 6.2% increase from the previous quarter and a 19.9% rise year-on-year.

Key Financial Metrics

Tier II Bond Issuance

In a separate development, AU Small Finance Bank has approved the issuance of Tier II Bonds up to ₹1,500.00 crore. This move is likely aimed at strengthening the bank's capital base to support its growth trajectory and meet regulatory requirements.

Merger Impact

It's worth noting that the year-on-year comparisons reflect the impact of the merger between AU Small Finance Bank and Fincare SFB, which became effective on April 1, 2024. This merger has contributed to the significant year-on-year growth in various financial metrics.

Conclusion

The bank has stated that the reported figures for Q4 FY25 are provisional and subject to review and approval by the Audit Committee, Board of Directors, and Statutory Auditors. Investors and stakeholders will be keenly watching for the official announcement of the financial results for the quarter and financial year ended March 31, 2025, which will provide a more comprehensive picture of the bank's performance.

Au Small Finance Bank , a prominent player in India's banking sector, has successfully raised 7.70 billion rupees (approximately $92.4 million) through the issuance of Tier-II bonds. This strategic move is set to strengthen the bank's financial position and enhance its ability to meet regulatory capital requirements.

Capital Boost Through Bond Issuance

The recent Tier-II bond issuance by Au Small Finance Bank marks a significant step in the bank's capital management strategy. Tier-II capital is an important component of a bank's overall capital structure, providing additional cushion against potential losses and supporting the bank's growth initiatives.

Financial Position and Growth

An analysis of Au Small Finance Bank's balance sheet reveals a strong growth trajectory over the past few years:

The bank has demonstrated substantial growth across key financial metrics:

• Total Assets: Increased by 21.29% year-over-year and by 159.65% over the past five years.
• Total Equity: Grew by 14.41% compared to the previous year and by 186.96% since 2020.
• Investments: Expanded by 35.18% year-over-year and by 154.34% over a five-year period.

Implications of the Bond Issuance

The successful raising of 7.70 billion rupees through Tier-II bonds is expected to have several positive implications for Au Small Finance Bank:

1. Enhanced Capital Adequacy: The additional Tier-II capital will improve the bank's capital adequacy ratio, ensuring compliance with regulatory requirements and providing a buffer against potential risks.

2. Support for Growth Initiatives: With a stronger capital base, the bank is better positioned to pursue growth opportunities, expand its loan book, and invest in new technologies and services.

3. Investor Confidence: The successful bond issuance reflects investor confidence in Au Small Finance Bank's financial health and future prospects.

4. Competitive Positioning: A robust capital structure allows the bank to compete more effectively in the dynamic banking landscape, potentially leading to improved market share and profitability.

As Au Small Finance Bank continues to strengthen its financial foundation, this latest capital raise through Tier-II bonds positions the institution for sustained growth and stability in the evolving banking sector.