CARE Rankings has upgraded AU Small Finance Financial institution’s long-term debt devices (tier-II bonds) ranking to AA/steady from AA-/steady assigned earlier. The ranking company has additionally restated the ranking of AU Small Finance Financial institution’s short-term devices (certificates of deposits) at A1+.
“The improve of rankings by CARE is a powerful endorsement for the financial institution’s rising banking franchise,” the financial institution mentioned in its assertion.
The financial institution’s continued development in enterprise and measurement, snug capitalization with confirmed capital elevating capability, diversified useful resource profile with robust development in deposit base and constant observe document of wholesome earnings efficiency are among the key components behind its improve in ranking of debt devices.
“The improve of rankings by CARE is a testomony to our franchise’s resilience within the face of the continuing pandemic, the tireless efforts of our workers and the robust rebound proven by our prospects and stakeholders. This ranking improve additionally comes on the heels of the current outlook change – from steady to optimistic – by CRISIL Rankings. Going ahead, we are going to proceed investing in our digital capabilities like AU 0101, video banking setup; introducing newer merchandise like bank cards and QR Codes; and aligning our enterprise throughout 10 SBUs,” mentioned Sanjay Agarwal, managing director and CEO, AU Small Finance Financial institution.
Establishing a diversified deposit franchise with sizable present account financial savings account (CASA) deposits within the first 5 years of its banking operations additionally supported the improve, as per the financial institution.
“CARE additionally highlighted the numerous scale-up of operations with the advances made when it comes to merchandise and geographical unfold, together with the development in asset high quality parameters within the present 12 months after being impacted by COVID-19-related stress and wholesome profitability.”
Supply: Live Mint