Increasing costs may take the wind out of AU Small Fin’s sails
SummaryIn the past few quarters, it had been focusing on strengthening its key business segments such as vehicle finance and MSME. It is also diversifying its loan book to segments such as home loans, gold loans, and credit cards.
Shares of AU Small Finance Bank Ltd have gained almost 30% from its 52-week lows seen in March. But further meaningful upsides could well be capped ahead in view of the expected net interest margin (NIM) compression, stiff competition for deposits and elevated operating costs (opex).