AU Small Finance Bank- Reorganises Itself Into 10 SBUs To Ensure Sustainability, Scalability: ICICI Securities

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .ICICI Securities Report.Recognising the massive structural growth opportunity across segments, AU Small Finance Bank Ltd. has reorganised itself into 10 strategic business units to ensure sustainability and scalability. With this backdrop, AU hosted an event to discuss key strategic priorities for two of its SBUs: commercial banking (~19% of advances), and secured business loans (~33% of advances). The successful scale-up of SBL book, as reflected in its 51% compound annual growth rate during FY12- FY22 with gross non-performing loan of 2.7% as of Sep-22, is an outcome of AU’s cashflow-based secured lending with focus on new to bank/new to credit customers, local teams for sourcing given state- / district-wise diversity in India, in-house technical and legal teams with vintage of more than four years, and highly motivated collections team. Preference for higher contribution from customers (loan-to-value at 46%) and self-occupied properties (~85%), 100% dual legal check, focus on acquiring quality customers (~68% of SBL book is towards customers having CIBIL score 700 and above), and in-house sourcing at 73% has ensured steady asset quality in the SBL segment for almost a decade..Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

AU Small Finance Bank- Reorganises Itself Into 10 SBUs To Ensure Sustainability, Scalability: ICICI Securities

AU carved out a commercial banking division in FY18 focused on scaling new products like business banking and agri financing.

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