In three years, AU Small Finance Bank wants to quadruple its balance sheet to Rs 2.5 lakh cr: MD

In three years, AU Small Finance Bank wants to quadruple its balance sheet to Rs 2.5 lakh cr: MD

On April 1, AU Small Finance Bank (AU SFB) combined with Fincare Small Finance Bank (Fincare SFB), the industry's first merger of that kind.

Thanks to the purchase of Fincare SFB and the nation's expanding spending trend, AU Small Finance Bank hopes to quadruple its balance sheet size to Rs 2.5 lakh crore in three years.

The bank operationalized the Authorized Dealer (AD-I) license earlier this week, launching "AU Remit" for currency trading and "AU DigiTrade" for cross-border trading.

Managing director of AU Small Finance Bank Sanjay Agarwal told PTI, "We need to double the balance sheet size to Rs 2.5 lakh crore by the time we complete our tenth decade of existence. We hope to achieve a growth of 25 per cent in the next three years."

When the bank first opened for operation in 2017, its balance sheet was worth Rs 10,000 crore; now, it is worth Rs 1.25 lakh crore. In the same time frame, the number of human resources increased from only 3,000 to 46,000, he said.

According to him, the branch network has grown from 300 to 2,400 contact points at the same time.

He emphasized that because AU Small Finance Bank is a public asset, the goal is to make it a bank that serves the needs of future generations, founded by and for the people.

Agarwal said that he would want to emulate HDFC Bank's strategy of expanding its company both organically and inorganically, using the bank as an example.

On April 1, AU Small Finance Bank (AU SFB) combined with Fincare Small Finance Bank (Fincare SFB), the industry's first merger of that kind.

First announced on October 29, 2023, the all-stock merger transaction saw the Reserve Bank of India (RBI) provide final clearance for the merger on March 4, 2024. The merger gave the shareholders of Fincare SFB 579 equity shares in AU SFB for every 2,000 equity shares held in Fincare SFB.

Due to the merger, AU SFB now has better access to South India, greatly broadening its network of distribution. The bank's diversified range of goods and services will be easier to distribute to a larger client base thanks to this enlarged presence, which will improve its standing in the local market.

According to him, the emphasis today is on providing outstanding banking services and value to the clients as well as making sure the integration goes smoothly over the course of the next nine to twelve months.

Both tech-led banks with strong client orientation have set up a special task force and outfitted their contact centers to handle all customer inquiries in order to guarantee a smooth merger and little inconvenience to customers.

In 2015, the RBI licensed 10 organizations to establish Small Finance Banks, which would provide small farmers and microbusiness owners basic banking services.

This is the first merger and acquisition that has happened after the regulator granted a license.

Small Finance Banks are established as part of the push for financial inclusion in order to provide basic banking services, such as deposit acceptance and lending, to the unbanked population, which includes small farmers, microbusiness owners, micro and small industries, and unorganized sector organizations.