AU Small Finance Bank’s rating upgraded from ‘AA-’ to ‘AA’
AU Small Finance Bank’s rating upgraded from ‘AA-’ to ‘AA’
The agency has also reaffirmed the ratings on the bank’s short-term instruments at A1+
Hyderabad / Mumbai, 25th March 2022: AU Small Finance Bank, India’s largest small finance bank, has been assigned a rating of CARE AA/Stable for its long-term debt instruments (Tier-II Bonds) by CARE Ratings, a reputed rating agency registered under the Securities and Exchange Board of India (SEBI). This is an upgrade from the Bank’s earlier rating, which was CARE AA-/Stable. In addition, the agency has also reaffirmed the rating of the bank’s short-term instruments (Certificate of Deposits) at A1+. The upgrade of ratings by CARE is a strong endorsement for the bank’s growing banking franchise.
The key drivers of the rating assigned to the debt instruments of AU Small Finance Bank Limited (AUSFB) were the bank's continued momentum of growth in business and size; comfortable capitalization with proven capital raising ability; diversified resource profile with strong growth in deposit base and consistent track record of healthy earnings performance. The Bank’s rating is also supported by the establishment of a diversified deposit franchise with sizeable Current Account Savings Account (CASA) deposits in the first 5 years of its banking operations. CARE also highlighted the significant scale-up of operations with the advances made in terms of products and geographical spread, along with the improvement in asset quality parameters in the current year after being impacted by COVID-19-related stress and healthy profitability.
Commenting on this development, Mr. Sanjay Agarwal, Managing Director and CEO, AU Small Finance Bank, said, “The upgrade of ratings by CARE is a testament to our franchise’s resilience in the face of the ongoing pandemic, the tireless efforts of our employees and the strong rebound shown by our customers and stakeholders. This rating upgrade also comes on the heels of the recent outlook change - from stable to positive - by CRISIL Ratings. Going forward, we will continue investing in our digital capabilities like AU 0101, video banking setup; introducing newer products like Credit cards and QR Codes; and aligning our business across 10 SBUs.”
About AU Small Finance Bank:
AU Small Finance Bank Limited (AU Bank) is a scheduled commercial bank, a Fortune India 500 Company, and the largest Small Finance Bank in the country. Starting its journey from the hinterlands of Rajasthan, today AU Bank is the largest Small Finance Bank with a deep understanding of the rural and semi-urban markets that have enabled it to build a robust business model facilitating inclusive growth. With 25+ years legacy of being retail-focused and customer-centric institution, AU started its banking operations in April 2017, and as of 31st December 2021, it has established processes across 880 banking touch points while serving 23.7 lakh customers in 15 States & 2 Union Territories with an employee base of 25,502 employees. The Bank has a net worth of ₹ 7,127 Cr, a deposit base of ₹ 44,278 Cr, and Assets Under Management (AUM) of ₹ 42,023 Cr. AU Bank enjoys the trust of marquee investors and is listed at both the leading stock exchanges viz. NSE and BSE. It has consistently maintained a high external credit rating from all major rating agencies like CRISIL, CARE Ratings, and India Ratings.
