AU Small Finance Bank's rating upgraded to 'AA'

Mumbai, Mar 26 AU Small Finance Bank, India's largest small finance bank, has been assigned a rating of CARE AA/Stable for its long-term debt instruments

(Tier-II Bonds) by CARE Ratings, a reputed rating agency registered under the Securities and Exchange Board of India (SEBI). This is an upgrade from the Bank's earlier rating, which was CARE AA-/Stable. In addition, the agency has also reaffirmed the rating of the bank's short-term instruments (Certificate of Deposits) at A1+. The upgrade of ratings by CARE is a strong endorsement for the bank's growing banking franchise.

The key drivers of the rating assigned to the debt instruments of AU Small Finance Bank Limited (AUSFB) were the bank's continued momentum of growth in business and size; comfortable capitalization with proven capital raising ability; diversified resource profile with strong growth in deposit base and consistent track record of healthy earnings performance. The Bank's rating is also supported by the establishment of a diversified deposit franchise with sizeable Current Account Savings Account (CASA) deposits in the first 5 years of its banking operations. CARE also highlighted the significant scale-up of operations with the advances made in terms of products and geographical spread, along with the improvement in asset quality parameters in the current year after being impacted by COVID-19-related stress and healthy profitability.

Commenting on this development, Sanjay Agarwal, Managing Director and CEO, AU Small Finance Bank, said, "The upgrade of ratings by CARE is a testament to our franchise's resilience in the face of the ongoing pandemic, the tireless efforts of our employees and the strong rebound shown by our customers and stakeholders. This rating upgrade also comes on the heels of the recent outlook change - from stable to positive - by CRISIL Ratings. Going forward, we will continue investing in our digital capabilities like AU 0101, video banking setup; introducing newer products like Credit cards and QR Codes; and

aligning our business across 10 SBUs."