MUMBAI — The Board of Directors of AU Small Finance Bank Limited approved the financial results for the first quarter ended June 30, 2026, delivering a strong operating performance supported by sustained growth in deposits and advances alongside improved asset quality. The Bank reported a 37% year-on-year increase in Net Profit (PAT) to ₹796 crore for Q1FY27, up from ₹581 crore in the corresponding quarter of the previous year. Net Interest Income (NII) grew 32% YoY to ₹2,695 crore, supported by an expansion in Net Interest Margin (NIM) to 5.9%, up 47 basis points YoY, while cost of funds declined by 60 basis points YoY to 6.48%. Annualized Return on Assets (RoA) and Return on Equity (RoE) stood at 1.7% and 15.6% respectively.
The Bank's balance sheet continued to expand, with Total Deposits growing 24% YoY to ₹1,57,727 crore. CASA deposits rose 22% YoY to ₹45,399 crore, maintaining a CASA ratio of 29%. Gross Loan Portfolio reached ₹1,44,250 crore, registering a 23% YoY growth, driven by a 25% YoY growth in secured businesses (Retail and Commercial) and a 42% YoY rise in disbursements. Asset quality showed marked improvement as fresh slippages declined 22% YoY to ₹798 crore. The Gross NPA ratio improved to 2.10% compared to 2.47% as of June 30, 2025, while the Net NPA ratio stood at 0.76%. Provisions for the quarter declined 30% YoY to ₹371 crore, even after absorbing an additional one-time provision of ₹23 crore from the further strengthening of provisioning policies across select segments.
Key strategic developments during the quarter included the elevation of Mr. Yogesh Jain to Deputy CEO, effective July 25, 2026, to strengthen leadership bandwidth alongside the Bank's growing scale and transition towards becoming a Universal Bank. AU Small Finance Bank also expanded its digital capabilities by rolling out agentic AI-enabled platforms for loan origination, establishing an enterprise AI Center of Excellence, launching four new lifecycle-based credit cards (AU Ananta, AU Lakskya, AU Tejas, and AU Prathama), and introducing zero-margin inward and outward remittances to strengthen its cross-border banking portfolio.