AUBANK 1Q: NII +30%. OPEX -6% , PAT BEAT ON ACCOUNT LOWER OPEX & AAVAS STAKE SALE
· AUBANK reported PAT of INR2.0b (5.5% YoY/ 64% QoQ) above our estimates (40% beat) mainly on account of lower opex and Aavas stake sale (INR272.5m).
· NII grew 30% YoY (7% QoQ decline) to INR5.16b (8% miss on estimates).
· Other income grew ~7% YoY/23.3% QoQ to INR2.25b (35% above estimates) as it includes profit from sale of investments of INR272.5m due to partial divestment in Aavas.
· Operating expenses declined 6% YoY (~30% QoQ declined) to ~INR3.0b and thus, C/I ratio improved to 39.9% vs 57.2% in 4QFY20. Thus, PPoP grew at 53% YoY to INR4.46b.
· The bank increased provisions to INR1.8b (20% QoQ increase) which includes provisions of INR1.4b towards COVID-19 (also made INR1.38b during 4QFY20). Thus, total contingent provisions towards COVID-19 increased to INR2.8b (~10% of total moratorium portfolio; 1% of advances)
· Bank’s gross AUM grew 17% YoY (3% QoQ decline) to INR300b. Retail AUM forms 84% of the total AUM (stood stable QoQ). While advances grew 14% YoY (3% QoQ decline) to INR262b. The bank nearly disbursed INR11.8b during the quarter which includes disbursements of INR2.5b under TLTRO 2.0.
· Total deposits grew at ~35% YoY/2% QoQ to INR267.3b. Retail deposits now forms 43% of total deposits. Retail deposits now forms 45% (vs 43% in FY20) of total deposits
· On the asset quality front, absolute GNPA/NNPA declined 2.3%/~25% QoQ and thus GNPA ratio stood broadly stable at ~1.69% while NNPA improved by 19bp to 0.62%. Thus, provision coverage improved to 63.5% (vs 52.5% in FY20)
· Tier 1 ratio improves to 18.5% (CAR at 21.7%)
· LCR stood at 150% vs 133% in FY20
Update on Moratorium
· Complete moratorium has been availed by 11% of total borrowers in terms of value (~INR28-INR29b)
· SMA pool, which was INR 27.68b as on 29th Feb 2020 has now reduced to INR11.33b as on 30th June 2020
· Update on collections:
· Full EMI recovery has also improved to 67% in the month of June’20 from 53% in the month of April. On an average 80% customers pays in full and another 5% in part in normal times.
· Overall Collection efficiency improved to 90% in the month of June from 54% in April. While Average monthly collection efficiency from April 2019 to February 2020 was at ~98%