Bengaluru - Oct 25: AU Small Finance Bank (AU SFB), India’s largest small finance bank and the first in over a decade to receive in-principle approval to transition into a Universal Bank, today announced its financial results for the quarter ended September 30, 2026, reporting strong growth across all key parameters.
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Key financial highlights for Q2’FY27 oNet Interest Margin increased by 33 bps YoY to 5.8% in Q2’FY27 from 5.5% in Q2’FY26 oCost of Funds (CoF) declined by 43 bps YoY to 6.41% in Q2’FY27 from 6.83% in Q2’FY26 oNet Interest Income (NII) grew by 32% YoY to ₹2,820 cr compared to ₹2,144 cr in Q2’FY26 oCore other income grew by 16% YoY to ₹736 cr compared to ₹634 cr in Q2’FY26 driven by fees from credit card and transaction banking oCredit cost (Including guarantee premium) declined by 45 bps YoY from 1.2% to 0.8% oPAT grew 53% YoY to ₹858 cr, with annualised RoA of 1.7% and RoE of 16.1% oDeposit book stands at ₹1,70,460 cr registering YoY growth of 28.6% which was nearly 1.6x of the system growth oCASA deposits stand at ₹50,289 cr, up 29% YoY and 11% QoQ; CASA ratio at 29.5% oGross loan portfolio (GLP) stands at ₹1,53,769 cr, registering a YoY growth of 25.1% which was nearly 1.3x of the system growth; Gross advances at ₹1,50,291 cr, up 27.9% YoY oGNPA ratio improved by 42 bps YoY to 1.99%; NNPA ratio improved by 7 bps to 0.81%; PCR at 83% including technical write-off oStrengthened leadership team further with the appointment of Mr. Anil Agarwal as Senior Executive Group Head – Commercial & Institutional Banking. He will lead Commercial and Institutional Banking, encompassing lending, transaction banking and funding solutions across key institutional and commercial segments oMr. Amol Padhye formally assumed role of Chief Risk Officer, and will help to further strengthen enterprise-wide risk governance, regulatory readiness and risk management frameworks oDuring the quarter, bank added net 183 touchpoints including 45 new liability branches and 100+ asset centres across the country oDigital Adoption: 46+ lac registered users on AU 0101 with 19.4 lac MAUs (Monthly Active Users) oAI-Native Bank: Gold Loan Agentic LOS live across 40 branches with more than 2.5 k loans disbursed; application to be rolled out to 100 branches in a phased manner oBank now has total 128 lac+ customers; serves them through a total 3,103 touchpoints across 21 states and 4 UTs with total strength of ~61K employees oICRA Ratings upgraded Bank’s long-term credit rating outlook to Positive from Stable, while re-affirming our long-term rating at AA |
Commenting on the performance, Mr. Sanjay Agarwal, Founder, MD & CEO of AU Small Finance Bank said, “Even as the global environment navigates heightened geopolitical and macroeconomic uncertainties, India continues to stand out for its resilience and sustained domestic momentum. This reinforces my conviction in the strength of India’s economic fundamentals and the immense opportunity that its long-term growth journey presents. Equally, I draw confidence from the strength we are building at AU. Strong institutions are built not merely for favourable conditions, but to navigate cycles while remaining firmly focused on the long term.
This quarter’s performance is a reflection of the institution we are steadily building, one that combines growth with profitability, and ambition with prudence. The balanced growth of our franchise, improving profitability and stable asset quality reinforce our confidence that the foundations for sustained, long-term performance are firmly in place. As we scale, our priorities remain clear: protect our customers’ interests, strengthen governance and continue investing in the capabilities that will shape our future. We remain watchful of the evolving environment, but the strength of our balance sheet and franchise gives us confidence to navigate uncertainties, sustain our momentum and continue building AU as a resilient, sustainable and trusted institution.”
Overall, AU Small Finance Bank delivered a strong performance while remaining focused on deepening customer relationships, strengthening its deposit and liability franchise, building technology-led capabilities and leveraging AI. The Bank maintained a disciplined approach to growth, profitability and asset quality while delivering consistent performance across key business parameters.
