Why did AU Small Finance Bank rally so sharply on 06 July?
Answer
Answer
The stock of AU Small Finance Bank rallied 11% to Rs.1,142 after its absolute gross NPAs promised to remain stable in Jun-21 quarter. While the gross NPA ratio would remain stable around 4.3%, AU Small Finance Bank expected the restructured loans to spike from 1.8% to 3.8%. The series of lockdowns on account of COVID 2.0 led to a 2% fall in gross advances in the Jun-21 quarter. Deposits were up 38% with CASA surge but MSME loans are an issue.