Stock Report

AU Small Finance Bank Reports 37% Jump in Q1 FY27 Net Profit to ₹796 Crore; Advances Surge 23%

Posted On : 2026-07-25 20:49:49( TIMEZONE : IST )

Jaipur-headquartered AU Small Finance Bank Limited (BSE: 500116, NSE: AUBANK, CIN: L36911RJ1996PLC011381) announced its unaudited financial results for the first quarter ended June 30, 2026. The lender posted a robust performance for Q1 FY27, backed by double-digit balance sheet expansion, expanding net interest margins, and improving asset quality.

Executive Summary & Key Highlights

Despite macroeconomic uncertainties stemming from West Asian geopolitical developments and tighter liquidity conditions, AU SFB delivered strong core operational growth.

Net Profit (PAT): Increased 37% year-on-year to ₹796 Crore (exact report: ₹79,595.29 Lakhs), compared to ₹581 Crore (₹58,085.82 Lakhs) in Q1 FY26.

Net Interest Income (NII): Expanded 32% year-on-year to ₹2,695 Crore.

Net Interest Margin (NIM): Expanded by 47 basis points year-on-year to 5.9%, supported by a 60 basis points reduction in the cost of funds to 6.48%.

Pre-Provisioning Operating Profit (PPoP): Grew 9% year-on-year to ₹1,435 Crore (₹1,43,547.43 Lakhs). Core PPoP (excluding treasury income) surged 41% year-on-year to ₹1,426 Crore.

Return Metrics: Annualized Return on Assets (RoA) improved to 1.7% (vs 0.37% in Q1 FY26), while Return on Equity (RoE) stood at 15.6%.

Earnings Per Share (EPS): Basic EPS for the quarter reached ₹10.63 per share (face value ₹10), compared to ₹7.80 in Q1 FY26. Book Value Per Share (BVPS) stood at ₹279.

Income Breakdown and Operational Expenses

Income & Expenses (₹ in Lakhs)             | Q1 FY27       | Q1 FY26       | Q4 FY26
-------------------------------------------------------------------------------------
Interest Earned                             | 5,30,274.23   | 4,37,844.30   | 5,01,914.67
Interest Expended                           | 2,60,724.46   | 2,33,377.19   | 2,43,681.89
Other Income                                |   68,921.56   |   81,060.61   |   73,095.21
Total Income                                | 5,99,195.79   | 5,18,904.91   | 5,75,009.88
Employee Costs                              | 1,06,392.20   |   86,552.64   | 1,04,491.16
Other Operating Expenses                    |   88,531.70   |   67,753.98   |   91,685.32
Total Operating Expenses                    | 1,94,923.90   | 1,54,306.62   | 1,96,176.48
Provisions & Contingencies (Excl. Tax)      |   37,148.81   |   53,330.66   |   26,943.39
Tax Expenses                                |   26,803.33   |   19,804.62   |   25,021.17

Total operational expenditure for the quarter stood at ₹1,949 Crore, up 26% year-on-year, driven by expanding distribution networks and ongoing technology investments. Core other income (excluding treasury) grew 33% year-on-year to ₹680 Crore.

Balance Sheet & Business GrowthvvThe bank's overall balance sheet expanded significantly, with total assets crossing ₹1.97 lakh crore.

1. Deposit Profile

Total Deposits: Rose 24% year-on-year (3% sequentially) to ₹1,57,727 Crore.

CASA Deposits: Grew 22% year-on-year to ₹45,399 Crore, yielding a CASA ratio of 29%. Current Account deposits grew 34% YoY to ₹8,498 Crore, while Savings Account deposits grew 19% YoY to ₹36,902 Crore.

Stable Deposit Ratio: (CASA + Retail TD + Non-callable bulk TD) accounted for 79% of total deposits.

2. Advances & Disbursements

Gross Loan Portfolio (GLP): Stood at ₹1,44,250 Crore, reflecting a 23% YoY increase and 3% QoQ growth. Loan disbursements surged 42% YoY.

Secured vs Unsecured: Secured portfolios (Retail + Commercial) expanded by 25% YoY, while unsecured businesses (MFI, Credit Cards, Personal Loans) grew by 11% YoY.

Yields: Average yield on gross advances stood at 13.7% compared to 14.1% in Q1 FY26.

Asset Quality and Provisions

AU SFB demonstrated significant asset quality improvements during the quarter:

Slippages: Declined 22% year-on-year to ₹798 Crore.

Gross NPA Ratio: Decreased by 37 basis points year-on-year to 2.10% (₹2,94,818.96 Lakhs) compared to 2.47% in Q1 FY26.

Net NPA Ratio: Improved to 0.76% (₹1,05,962.06 Lakhs) compared to 0.88% in Q1 FY26.

Provisions: Total provisions dropped 30% year-on-year to ₹371 Crore (₹37,148.81 Lakhs). This includes an additional one-time provision of ₹23 Crore toward further strengthening provisioning policies across MFI, PL/BL, Two-wheeler, and EEFI segments.

Coverage Ratios: Provision Coverage Ratio (PCR) including technical write-offs remained healthy at 85%. The bank maintains ₹37 Crore in contingency provisions and ₹41 Crore in floating provisions. Annualized credit cost stood at 0.8%.

Segmental Financial Results

Segment Revenue (₹ in Lakhs)                | Q1 FY27       | Q1 FY26       | Q4 FY26
------------------------------------------------------------------------------------------
Retail Banking                              | 4,45,030.55   | 3,65,189.21   | 4,26,717.44
Wholesale Banking                           |   64,710.48   |   47,950.49   |   59,637.94
Treasury Operations                         |   80,105.64   |   98,024.05   |   73,441.62
Other Banking Operations                    |    9,349.12   |    7,741.16   |   15,212.88
Total Segment Revenue                       | 5,99,195.79   | 5,18,904.91   | 5,75,009.88

Segment Results / PBT (₹ in Lakhs)          | Q1 FY27       | Q1 FY26       | Q4 FY26
-------------------------------------------------------------------------------------
Retail Banking                              |   66,425.02   |   27,020.64   |   70,833.43
Wholesale Banking                           |   20,824.34   |   15,075.13   |   17,168.48
Treasury Operations                         |   10,866.30   |   28,876.68   |    6,151.15
Other Banking Operations                    |    8,282.96   |    6,917.99   |   14,055.06
Total Segment PBT                           | 1,06,398.62   |   77,890.44   | 1,08,208.12

Capital Adequacy, Leadership & Digital Milestones

Capital Adequacy Ratio (CRAR): Stood strong at 18.93% (Tier-I capital adequacy at 17.1%), comfortably above statutory requirements.

Leadership Update: The Board approved the elevation of Mr. Yogesh Jain, Chief Operating Officer, to the role of Deputy CEO effective July 25, 2026, to strengthen executive leadership.

Technology & AI Push: Rolled out an agentic AI-enabled mobile platform for gold loan origination, extending it to mortgages. The bank established an AI Centre of Excellence targeting 50+ enterprise automation use cases; ~70% of Anti-Money Laundering (AML) alerts are now resolved via AI models. Over 90% of banking service requests are processed digitally via AU 0101.

Network & Distribution: Added ~130 net touchpoints during Q1, including 16 new liability branches in urban markets. The bank currently serves over 1.25 crore customers with a workforce of 58,400+ employees.

Product Launches & Alliances: Introduced four new credit cards (AU Ananta, AU Lakskya, AU Tejas, AU Prathama), zero-margin cross-border remittances, and enhanced 3-in-1 accounts with fund-blocking capabilities in partnership with Motilal Oswal.

Commenting on the performance, Mr. Sanjay Agarwal, Founder, MD & CEO, AU Small Finance Bank said, "Indian economy continues to remain resilient despite a challenging quarter marked by geopolitical uncertainties. I thank the Government and regulators for their proactive measures in safeguarding the economy from any major direct impact.

Against this macroeconomic backdrop, the Bank delivered a strong and well-rounded performance, with healthy growth in both deposits and advances alongside improved profitability. This reflects the investments made in strengthening the franchise, particularly over the last two years, through expanded distribution, enhanced technology capabilities, stronger product offerings and high-quality talent pool build-out.

What is particularly encouraging is the continued improvement in both the quality of growth and the quality of earnings. Our performance is increasingly being driven by the underlying strength of the franchise and disciplined execution, rather than cyclical or one-off factors.

While we remain mindful of the evolving macro environment, our strong capital and liquidity buffers, robust underwriting capabilities, and deepening franchise strengths provide the resilience to manage uncertainties and the flexibility to capture opportunities responsibly. As we continue to build a stronger, more diversified institution, we remain committed to delivering consistent, high-quality growth and creating enduring value for all our stakeholders."

Shares of AU Small Finance Bank Limited was last trading in BSE at Rs. 1002.25 as compared to the previous close of Rs. 976.30. The total number of shares traded during the day was 825841 in over 6948 trades.

The stock hit an intraday high of Rs. 1015.00 and intraday low of 967.40. The net turnover during the day was Rs. 807471173.00.