Company Update : AU Small Finance Bank by Motilal Oswal Financial Services Ltd
Healthy business growth; CASA ratio improves QoQ to 28.8%
* AUBANK reported 3.2% QoQ (+25.8% YoY) growth in gross advances to ~INR1.40t. Including the securitized/assigned + IBPC loan portfolio, the total loan portfolio grew 2.8% QoQ (22.6% YoY). Growth stood slightly lower than our estimated net advances growth of 28.9% YoY/5.4% QoQ.
* The bank securitized its asset portfolio of INR37.9b in 1QFY27 and INR42.9b in 4QFY26.
* Deposit growth was strong at 23.5% YoY/3.3% QoQ to reach INR1.58t (lower than our estimated growth of 25.7% YoY/5.1% QoQ).
* CASA deposit growth was higher than overall deposit growth QoQ at 4.7% (21.9% YoY) to INR454b. As a result, CASA ratio improved to 28.8% from 28.4% as of 4QFY26.
* Overall, business growth was healthy with a marginal miss to our expectations on both advances as well as deposit growth. AU Bank remains our top pick in the mid-sized private bank space.
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