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Festive season to push credit demand: Au Small Finance Bank CEO

With the onset of the festive season, Au Small Finance Bank expects credit demand to pick in the coming quarters, its Managing Director and CEO Sanjay Agarwal said. The lender also believes its recovery, as measured by collection efficiency, will remain upward of 100 per cent in the next few months.

“Credit demand (at present) is not up to the mark because we are still coming out of that (COVID) phase, and I believe that the festive season should give us a lot of energy and boost,” Agarwal said.

He said the long term prospects look very good as the Capex cycle is about to begin.

“We are seeing green shoots in the corporate cycle and the SME segment,” Agarwal said.

He said recovery for the bank remained very strong post-June 2020 till March 2021, but was impacted in April and May 2021 due to the second wave of COVID-19.

In June 2021, the collection efficiency of the bank was 114 per cent and it was 101 per cent for Q1 FY22, according to the bank.

In July, collections were at 107-108 per cent, Agarwal said.

“I believe that for our recovery, things are very strong. I strongly believe that for the next some of the months, it (collection efficiency) will remain north of 100 per cent,” Agarwal said.

In the quarter ended June 2022, the lender reported a profit after tax of Rs 203 crore as against Rs 201 crore in the corresponding quarter of the FY2021.

During the April-June quarter of FY2022, gross non-performing assets (GNPAs) stood at 4.3 per cent.

The lender on Wednesday launched its digital banking platform – AU 0101, and its own credit card.

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