AU Small Finance Bank Declares 1:1 Bonus Issue: Check Details

On Tuesday, the Au Small Finance Bank announced a 1:1 bonus issuance. A bonus issuance of one equity share for every equity share owned has been suggested by the company's board of directors.

The bank has informed BSE by saying that "To celebrate successful completion of 5 years of the Banking operations, the Board considered and recommended a bonus issue of 1 equity share for every 1 equity share held, subject to approval by the shareholders and any other applicable statutory and regulatory approvals. Further, the bonus shares will be credited to those shareholders who are holding the equity shares as on a record date to be determined by the Board."

The bank has also clarified on 26th April 2022 that "The Board recommended dividend of Rs. 1/- per equity shares on pre-bonus share capital out of net profit for the year ended 3i5t March, 2022, subject to approval of shareholders at the ensuing Annual General Meeting. Consequent to approval of the proposed bonus issue by the shareholders, the dividend shall be adjusted proportionately i.e. Rs. 0.50/- per equity share on post-bonus share capital. The dividend on equity shares will be paid/dispatched after the same is approved by the shareholders at the ensuing Annual General Meeting (AGM) of the Bank."

The net profit of AU Small Finance Bank (SFB) increased by 105 percent to Rs 346 crore in the quarter ending March 2022, compared to Rs 169 crore in the same quarter of the previous fiscal 2020-21. Net Interest Margin (NIM) was 6.3 percent in Q4'FY22, up from 5.7 percent in Q4'FY21, and ROA was 2.2 percent, with ROE at 18.9 percent. The bank reported a net profit of Rs 1,130 crore for the full year 2021-22, down marginally from Rs 1,171 crore in 2020-21, while full-year revenue increased by 21% to Rs 6,915 crore and net interest income increased by 37% to Rs 3,234 crore, according to a regulatory filing.

Commenting on the performance, Mr. Sanjay Agarwal, MD & CEO, AU Small Finance Bank said, " Amid an exceptionally challenging environment, AU Bank completing 5 years as a Small Finance Bank on 19th April'2022 gives me immense satisfaction and pride as a founder and an entrepreneur. I am grateful to our customers, investors, employees, and other stakeholders for their unwavering trust in AU. I would also like to express my gratitude to the Government, RBI and other regulators for their support and guidance during these challenging times. To express gratitude to our shareholders and to celebrate the successful completion of 5 years as an SFB, the Board has recommended to offer bonus shares in the ratio 1:1 and has also recommended a dividend of Rs. 1/- per equity share (pre-bonus issue) or ₹ 0.50/ per share (Ex-bonus issue) for FY22.

"Our financial performance in the current quarter has been quite strong and we have used the headroom available, judiciously, to secure our future by tightening our provisioning policy, increasing our coverage ratio, creating floating provision and expanding our Board. This coupled with our investments in people, digital assets and brand-building have enabled us to build a customer-centric, future ready bank. I believe that we are rightly positioned to take advantage of the emerging major opportunities in our core segments. We remain watchful regarding risks around inflationary pressures and geo-political risks and Covid, and remain cautiously optimistic in our approach," he further added.

In the previous year, shares of AU Small Finance Bank have returned 25.53 per cent, and the stock has gained 27.95 per cent year-to-date (YTD). In the previous six months, the stock has returned 7.51 per cent, and in the last month, it has climbed by 12.20 per cent. On the NSE, the stock has dropped -6.45% in the previous five trading days. The stock ended at a market price of Rs 1,415.55 yesterday, and it opened at Rs 1,402.70 today, and it is now trading at a market price of Rs 1,359.70 on the NSE as of 27 Apr, 11:34 am IST. The stock reached its 52-week high of Rs 1,465.95 on 21-APR-22 and its 52-week low of Rs 910.00 on 05-MAY-21, according to NSE data.