AU SFB Q1 results 2026: Private sector lender AU Small Finance Bank posted its earnings for the quarter ended June 2026 (Q1FY27) on Saturday, 25 July. It reported a strong performance for the first quarter, with net profit rising 37% year-on-year (YoY), supported by healthy growth in net interest income (NII) and a sharp decline in provisions.
The lender posted a net profit of ₹796 crore for the quarter, compared with ₹581 crore in the corresponding period last year.
NII, the difference between interest earned and interest paid, increased 32% YoY to ₹2,696 crore from ₹2,045 crore a year ago, reflecting robust growth in the bank’s core lending business.
Operating profit also registered growth during the quarter, rising 9.4% YoY to ₹1,435 crore from ₹1,312 crore in the year-ago period.
“Bank delivered another quarter of strong operating performance with disciplined execution and continued focus on strengthening the quality of its balance sheet. The Bank continued to deepen customer relationships, expand its secured lending businesses and invest in technology-led capabilities while maintaining prudent risk management. With a strong capital position, healthy liquidity profile and continued progress towards becoming a Universal Bank, AU remains well positioned to deliver sustainable and profitable long-term growth,” said the lender.
Asset quality and provisions
Asset quality remained broadly stable on a sequential basis, although there was a marginal uptick in non-performing assets. Gross non-performing assets (GNPA) stood at 2.10% at the end of the June quarter, compared with 2.03% in the previous quarter. Net non-performing assets (NNPA) came in at 0.76%, slightly higher than 0.74% reported in the March quarter.
The bank also reported a significant reduction in credit costs. Provisions declined to ₹371 crore during the quarter from ₹533 crore in the corresponding quarter last year. Provisions declined 30% YoY, including an additional one-time provision of ₹23 cr from further strengthening of the provisioning policy for MFI, PL/BL, Two-wheeler and EEFI businesses
However, provisions were higher than the ₹269 crore reported in the preceding quarter.
Other Highlights
Total deposits of AU Small Finance Bank grew 24% year-on-year (YoY) and 3% quarter-on-quarter (QoQ) to ₹1,57,727 crore during the June quarter. CASA deposits increased 22% YoY and 5% QoQ, while the CASA ratio stood at 29%, reflecting healthy growth in low-cost deposits.
The bank’s gross loan portfolio expanded 23% YoY and 3% QoQ to ₹1,44,250 crore. Loan disbursements witnessed robust growth of around 42% YoY during the quarter. Within the portfolio, secured businesses, comprising retail and commercial segments, grew 25% YoY and 4% QoQ, while unsecured businesses registered an 11% YoY and 5% QoQ increase.
On the cost front, the bank’s cost-to-assets ratio, excluding the CGFMU premium, stood at 4.0%, compared with 3.9% in the corresponding quarter of the previous financial year. Meanwhile, annualised credit cost, including the CGFMU premium, improved to 0.8% from 1.4% in Q1 FY26, indicating lower credit costs during the quarter.
Management commentary
Commenting on the quarterly performance, AU Small Finance Bank Founder, MD & CEO Sanjay Agarwal said the Indian economy remained resilient despite geopolitical uncertainties, supported by timely measures taken by the government and regulators. He added that the bank delivered healthy growth in deposits and advances, along with improved profitability, driven by investments in expanding its distribution network, strengthening technology capabilities, enhancing product offerings and building a strong talent pool.
“Our performance is increasingly being driven by the underlying strength of the franchise and disciplined execution, rather than cyclical or one-off factors,” Agarwal said.
He added that the bank’s strong capital and liquidity position, robust underwriting capabilities and deepening franchise would help it navigate uncertainties while pursuing sustainable growth. “We remain committed to delivering consistent, high-quality growth and creating enduring value for all our stakeholders,” he said.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
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