Growing focus on secured loans crucial for AU SFB amid rising unsecured loan stress

AU Small Finance Bank : AU Small Finance Bank (AUSFB) stock has declined 8% in the past month, underperforming the BSE Bankex. Higher NPAs and credit costs in microfinance and credit card segments have pressured earnings. The bank has lowered FY25 loan growth guidance to 20%, shifting focus to secured loans. A lower interest rate cycle may aid margin recovery, with credit costs expected to remain high before stabilizing in the next fiscal year.