small finance banks: Will bearish market conditions prove roadblock in AU SFB’s solid market journey?

The credit base of SFBs and private banks differs significantly. The Reserve Bank of India (RBI) has limited the amount of money SFBs can lend; private banks do not have these restrictions.

Synopsis

AU Small Finance Bank, Ujjivan Small Finance Bank, Equitas Small Finance Bank and Suryoday Small Finance Bank are the four small financial banks (SFBs) listed on the Indian stock exchanges. Some players are experiencing internal government challenges and some have been severely affected by the pandemic. AU Small Finance Bank is one of the companies that stands out among its peers.

Following the pandemic, national confinements hampered profitability in all sectors. AU Small Finance Bank was also affected, but was able to recover quickly from setbacks. The quality of its assets has recovered and net interest margins (NIMs) are improving. The next monsoon lending season should help the bank stay in the fast-growing mode and keep the valuation even in bearish market conditions. AU Small Finance Bank, Ujjivan Small Finance

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Gaurav Jain and Parimal Ade

AND COLLABORATORS

10 minutes of reading, Last updated:

June 30, 2022 at 1:11 IST

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