AU Small Finance Bank has reported 26% growth in net profit at Rs 667.67 crore for the quarter ended December 2025 (Q3FY2026). Net Interest Income (NII) increased 16% while the core fee income of the bank also improved 22% in Q3FY2026. The Net Interest Margin (NIM) of the bank improved on sequential basis to 5.70% in Q3FY2026 from 5.5% in Q2FY2026, while eased from 5.90% in the corresponding quarter of previous year.

On business front, the business growth accelerated to 21% at end December 2025 from 19% at end September 2025, as the loan book growth gained to 19%. CASA ratio of the bank has declined to 28.9% at end December 2025 from 30.6% at end December 2024.

NII growth improves as NIM rises: Interest income increased 15% to Rs 4727.47 crore, while interest expenses moved up 14% to Rs 2386.20 crore in Q3FY2026. NII improved 16% to Rs 2341.27 crore in Q3FY2026.

Margins improve on sequential basis: The bank has shown 45 bps YoY decline in cost of deposits to 6.61%, while yield on advances declined 60 bps YoY to 13.80% in Q3FY2026. Thus, the NIM has eased 20 bps YoY to 5.70%, while rose 20 bps qoq to 5.70% in Q3FY2026.

Healthy growth in the core fee income: The non-interest income of the bank increased 17% to Rs 723.80 crore in Q3FY2026. Bank has posted strong 22% growth in core fee income to Rs 696 crore, while the treasury income eased 41% to Rs 27 crore in Q3FY2026.

Expense ratio rises: The operating expenses of the bank increased 29% to Rs 1849.75 crore, as other expenses moved up 22% to Rs 830.74 crore, while employee expenses rose 35% to Rs 1019.01 crore in Q3FY2026. Cost to income ratio deteriorated to 60.3% in Q3FY2026 compared with 54.4% in Q3FY2025. Operating Profit rose 1% to Rs 1215.32 crore.

Provisions and contingencies decline: The bank has shown 34% decline in provisions to Rs 331 crore. The loan loss provisions fell 39% to Rs 301 crore, while standard asset provisions increased 190% to Rs 29 crore in Q3FY2026.

PBT increased 26% to Rs 884.18 crore in Q3FY2026. Effective tax rate declined to 24.5% in Q3FY2026 from 24.9% in Q3FY2025. Net Profit increased 26% YoY to Rs 667.67 crore in Q3FY2026.

Asset quality improves: The bank has improved asset quality in Q3FY2026.

The fresh slippages of loans stood at Rs 791 crore in Q3FY2026 compared with Rs 908 crore in previous quarter and Rs 956 crore in the corresponding quarter last year.

The recoveries and upgradations of NPAs stood at Rs 394 crore, while the write-off of loans was at Rs 352 crore in Q3FY2026.

Provision coverage ratio was steady at 83% at end December 2025 compared to 84% a quarter ago and 80% a year ago.

The capital adequacy ratio of the bank stood at 19.0% with Tier I ratio at 17.1% at end December 2025.

Asset Quality Indicators: AU Small Finance Bank
'	Dec-25	Sep-25	Jun-25	Mar-25	Dec-24	Variation
						QoQ	YTD	YoY
Gross NPA (Rs Crore)	2880.54	2835.34	2751.32	2477.03	2335.51	2	16	23
Net NPA (Rs Crore)	1091.46	1015.66	971.34	791.34	905.60	7	38	21
% Gross NPA	2.30	2.41	2.47	2.28	2.31	-11	2	-1
% Net NPA	0.88	0.88	0.88	0.74	0.91	0	14	-3
% PCR	83.00	84.00	83.00	84.00	80.00	-100	-100	300
% CRAR - Basel III	19.01	18.78	19.42	20.06	18.01	23	-105	100
% CRAR - Tier I - Basel III	17.10	16.90	17.50	18.10	16.90	20	-100	20
Variation in basis points for figures given in percentages and in % for figures in Rs crore

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Business Highlights:

Business growth improves: The business of the bank has increased at an accelerated pace of 21% YoY to Rs 268312 crore end December 2025, as advances growth improved to 19% to Rs 129897 crore and deposits growth moved up to 23% to Rs 138415 crore at end December 2025. With the faster growth in deposits, the credit to deposit ratio declined to 93.8% at end December 2025 from 97.0% at end December 2024.

CASA deposits ratio declines: The CASA deposits of the bank increased 16% YoY to Rs 39947 crore at end December 2025. The current account deposits moved up 31% to Rs 7562 crore, while saving account deposits increased 13% to Rs 31401 crore end December 2025. The CASA ratio eased to 28.9% at end December 2025 compared to 30.6% at end December 2024, while declined from 29.4% at end September 2025. The term deposits have increased 26% to Rs 98468 crore end December 2025.

Strong loan growth: Within the loan book, the retail loans increased 19% YoY to Rs 90608 crore at end December 2025, while credit to MSME increased 25% to Rs 27743 crore. The corporate credit has also increased 68% to Rs 4940 crore end December 2025. However, the agriculture credit declined 11% to Rs 6606 crore end December 2025.

Investment book of the bank increased 18% YoY to Rs 39793 crore at end December 2025.

Branch expansion: The bank has added 100 branches and added 35 ATMs in Q3FY2026, taking overall tally to 2726 branches and 742 ATM`s end December 2025.

Book value of the bank stood at Rs 253.1 per share at end December 2025, while the adjusted book value (net of NNPA and 10% of restructured advances) was Rs 238.2 per share at end December 2025.

Financial Performance 9MFY2026:

Bank has posted 13% increase in net profit to Rs 1809.38 crore in the nine months ended December 2025 (9MFY2026). The net interest income increased 10% to Rs 6530.35 crore, while non-interest income moved up 27% to Rs 2246.99 crore, leading net total income to increase 14% to Rs 8777.34 crore in 9MFY2026. The operating expenses increased 15% to Rs 5040.10 crore, while provision and contingencies jumped 16% to Rs 1345.28 crore. PBT increased 12% to Rs 2391.96 crore in 9MFY2026. The cost-to-income ratio rose to 57.4% in 9MFY2026 compared to 57.2% in 9MFY2025. An effective tax rate eased to 24.4% in 9MFY2026 compared to 24.8% in 9MFY2025. The net profit has increased 13% to Rs 1809.38 crore in 9MFY2026.

AU Small Finance Bank: Results
Particulars	2512 (3)	2412 (3)	Var %	2512 (9)	2412 (9)	Var %	2503 (12)	2403 (12)	Var %
Interest Earned	4727.47	4113.48	15	13617.19	11793.13	15	16063.73	10554.71	52
Interest Expended	2386.20	2090.77	14	7086.84	5875.47	21	8052.15	5397.63	49
Net Interest Income	2341.27	2022.71	16	6530.35	5917.66	10	8011.58	5157.08	55
Other Income	723.80	618.41	17	2246.99	1765.65	27	2526.31	1697.14	49
Net Total Income	3065.07	2641.12	16	8777.34	7683.31	14	10537.89	6854.22	54
Operating Expenses	1849.75	1436.21	29	5040.10	4394.88	15	5880.41	4388.00	34
Operating Profits	1215.32	1204.91	1	3737.24	3288.43	14	4657.48	2466.22	89
Provisions & Contingencies	331.14	501.68	-34	1345.28	1157.51	16	1792.62	389.99	360
Profit Before Tax	884.18	703.23	26	2391.96	2130.92	12	2864.86	2076.23	38
EO	0.00	0.00	-	0.00	0.00	-	0.00	-76.80	-
PBT after EO	884.18	703.23	26	2391.96	2130.92	12	2864.86	1999.43	43
Provision for tax	216.51	174.78	24	582.58	528.68	10	682.13	464.71	47
PAT	667.67	528.45	26	1809.38	1602.24	13	2182.73	1534.72	42
EPS*(Rs)	35.7	28.4	'	32.3	28.7	'	29.3	23.8	'
Equity	747.4	744.2	'	747.4	744.2	'	744.5	669.2	'
Adj BV (Rs)	238.2	210.5	'	238.2	210.5	'	217.9	180.2	'
* EPS and Adj BV are calculated on diluted equity as given for each year. Face Value: Rs 10, Figures in Rs crore
Source: Capitaline Corporate Database

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