AU Small Finance Bank shares gain 2% on universal bank ambitions

Shares of AU Small Finance Bank on Wednesday rose 2% to its day’s high of 686.40 on BSE after the company on Tuesday announced that the company has applied for the Reserve Bank of India (RBI) for a voluntary transition from a small finance bank to a universal bank.

“We wish to inform that the Bank has submitted an application to the Reserve Bank of India ("RBI") to seek approval for voluntary transition from a Small Finance Bank to Universal Bank today i.e. on September 03, 2024,” said the bank in its filing to the exchanges.

Earlier in its board meeting in July, the bank had approved making this application to the central bank for the transition constituting a committee to vet the application for submission.


The committee included chairman HR Khan, independent directors Pushpinder Singh and MS Sriram, and managing director Sanjay Agarwal.

AU is one of the two small finance banks which are eligible to apply at this point of time. The other one is Ujjivan Small Finance Bank.

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AU Small Finance Bank had a 30% year-on-year (YoY) rise in net profit for the June quarter at Rs 503 crore, buoyed by a net interest income growth of 54% YoY to Rs 1921 crore while net interest margin for the quarter rose to 6% from 5.7% in the year-ago period.

The shares of AU Small Finance Bank have given negative returns of 5.8% while in the current calendar year, they have witnessed declines of 14%. However, in the last week, the stock surged 7%.

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