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The Board of Directors of AU Small Finance Bank Limited at its meeting held today, approved the financial results for the quarter and nine-month ended December 31, 2025.

Executive Summary

The implementation of GST rate cuts and a robust festive season added momentum to underlying economic activity during the quarter, resulting in a meaningful pickup in credit demand. Higher auto sales, stronger consumer spending, and a revival in MSME and commercial activity supported banking sector credit growth of 14.4% YoY. Deposit growth, however, lagged at 12.7% YoY amid tighter liquidity conditions and heightened competition across the sector.

Against this backdrop, the Bank delivered a well - rounded performance across all key parameters, supported by disciplined underwriting, prudent management of the cost of funds, and a consistent focus on sustainable, quality-led growth.

Performance at a glance (Q3’FY26):

Profitability

NII grew by 16% YoY to Rs2,341 Cr (vs Rs2,023 Cr in Q3’FY25)
NIM, calculated on daily avg. of interest earning assets incl off book, improved by ~25bps to 5.7% (vs 5.5% in Q2)
 +     Improvement in CoF by 22bps QoQ to 6.61% and benefits from CRR cut, lower surplus liquidity

* Decline in Yields by 10bps largely on account of change in asset mix

Other income stood at Rs724 Cr up 17% YoY (vs Rs618 Cr in Q3’FY25)
Total opex (excl exceptional item) at Rs1,830 Cr grew 27% YoY (vs Rs1,436 Cr in Q3’FY25) led by higher business volumes, Investment in manpower & distribution, and marketing & promotion related expenses
~11K employee addition YoY
Added net 100 touchpoints in Q3 incl. 27 new liability branches
20%+ QoQ increase in disbursement volumes 
The Bank’s pre-provisioning operating profit (PPoP) for Q3’FY26 grew by 3% YoY to Rs1,235 Crore (vs Rs1,205 Cr in Q3’FY25)  
Credit cost reduced by 34% YoY to Rs331 crore in Q3’FY26 (vs Rs502 crore in Q3’FY25) led by normalization in MFI and Credit cards
Profit after Tax (PAT) increased by 26% YoY at Rs668 Cr (vs Rs528 Cr in Q3’FY25) with Annualized RoA/ RoE for Q3’FY26 at 1.6% and 14.3%
Excluding exceptional item, PAT was up 29% YoY at Rs682 Cr with RoA/ RoE at 1.6%/ 14.6%

Balance Sheet

Total Deposits grew 23.3% YoY and 4.5% QoQ to Rs1,38,415 Cr; CASA remained stable at ~29% as of Dec’25 vs 29% in Sep’25
CASA deposits grew 16% YoY led by Current deposits growth of 31% YoY to Rs7,404 Cr and Savings deposits growth of 13% YoY to Rs32,543 Cr
Acquisition of new CASA accounts growing at robust pace – monthly CASA account opening run-rate reached 1 Lac the first time in Dec’25
Stable deposits (CASA + Retail TD + Non-callable Bulk TD) forms 80% of total deposits
Cost of Funds (CoF) declined by 22bps to 6.61% in Q3’FY26 from 6.83% in Q2’FY26
Overall, Gross loan portfolio (GLP) stood at Rs1,29,898 Cr, registering a YoY growth of 19.3% and QoQ growth of 5.7%
GLP excl unsecured businesses registered a growth of 23.4% YoY and 6.1% QoQ
Unsecured businesses (which form ~7% of our business), registered a de-growth of 17% YoY but have started to turn around and grew by 1% QoQ led by MFI
Yield on gross advances moderated by 10bps QoQ to 13.8% (vs 13.9% in Q2’FY26)
CD ratio after adjusting for loans against which refinance was availed from domestic Development Finance Institutions (DFIs), stands at 82% (vs 81% in Q2’FY26)
Average LCR for the quarter was at 118% (vs 119% in Q2’FY26)

Asset Quality

Asset quality improved sequentially benefiting from normalization in unsecured businesses and seasonal recovery in secured assets
Slippage reduced by 13% QoQ at Rs791 Cr (vs Rs908 Cr in Q2’FY26)
GNPA declined sequentially to 2.30% (vs 2.41% in Q2’FY26), Net NPA stable at 0.88%
Credit cost declined ~31% QoQ at Rs331 crore (vs Rs481 crore in Q2’FY26) with annualized credit cost for the quarter at 0.8% of avg assets
Collection Efficiency in non-overdue MFI loans improved to 99.3% (vs 98.9% in Q2’FY26)
SMA book for MFI declined to 1.9% (vs 2.9% in Q2’FY26)  

9M’FY26 highlights

Profitability

Net Interest Income (NII) grew 10% YoY to Rs6,530 Crore (vs Rs5,918 Cr in 9M’FY25)
Net Interest Margin (NIM) for 9M’FY26 stood at 5.5%
Cost of Funds (CoF) for 9M’FY26 at 6.84%
The Bank’s pre-provisioning operating profit (PPoP) for 9M’FY26 grew 14% YoY to Rs3,757 Crore (vs Rs3,288 Cr in 9M’FY25)
Credit Cost for 9M’FY26 at 1.1% of avg assets
PAT grew 13% YoY to Rs1,809 Cr (vs Rs1,602 Cr in 9M’FY25)
Excluding exceptional item, 9M’FY26 PAT grew by 14% at Rs1,824 Cr
Return on Asset (ROA) and Return on Equity (ROE) stood at 1.5% and 13.3% respectively

Distribution

Bank increased its presence by adding a net of 100 touchpoints, including 27 new liability branches, during the quarter taking the total number of touchpoints to 2,726 across 21 states and 4 UTs
We cater to 125 Lac+ customers with a total strength of 59k+ employees

Other key initiatives and updates

Appointed 3 new independent directors to further strengthen the Board and governance - Mr. N S Venkatesh,  Mr. Satyajit Dwivedi and Mr. Phani Shankar appointed as Non-executive Independent Directors for a term of three years
Re-appointed Ms. Malini Thadani as Non-Executive Independent Director for a second term of three years
As part of the long term succession planning and roadmap for accelerating and consolidating leadership depth in the Bank and to provide flexibility for future organizational requirements, following executive changes have been approved by the Board subject to requisite approvals

Mr. Uttam Tibrewal, Executive Director and Deputy CEO, upon completion of his current tenure as Whole-Time Director on April 18, 2026, will continue in his capacity as Deputy CEO and remain responsible for leading our key business verticals including Retail Assets and Liabilities. Alongside these responsibilities, he will devote increased time to on ground engagement to drive growth, strengthen customer relationships, and expand the Bank’s presence across newer geographies

Mr. Vivek Tripathi, Chief Credit Officer, will be appointed as Whole Time Director (Executive Director) subject to RBI approval. An alumnus of IIM Lucknow, Vivek has been with AU since 2014, contributing across Business, Credit, and Risk in various leadership roles. As ED & CCO, he will continue to provide enterprise wide stewardship of AU’s credit architecture, unifying Credit, Policy & Underwriting, Portfolio Management, Collections, Legal Recovery & Corporate Legal, Vigilance, and Fraud Control under a single governance framework.

Onboarded Ranbir Kapoor and Rashmika Mandanna as the new Brand Ambassadors and also launched a new brand campaign “Soch Badlo aur Bank Bhi” connecting with the new-age and showcasing its tech-first outlook
Launched 'AU Multi-Currency Forex Card' in collaboration with Mastercard providing a seamless, secure, and smart travel payment solution for globetrotters
Launched Exclusive Banking Program for Chartered Accountants (CAs) in collaboration with ICAI to offer customized products and solutions to them.
Launched ‘M’ circle: a distinctive women’s banking proposition designed to offer personalized privileges, curated financial solutions, and exclusive lifestyle experiences tailored to their unique needs and aspirations.
Bank pioneered integration with NBBL's "Banking Connect” platform unlocking nationwide merchant access through a unified Net Banking interface, setting a new benchmark in digital payment experiences
Mobile Tap & Pay functionality was enabled on Samsung Wallet, which allows AU SFB credit card holders to make secure, convenient contactless payments using (Near-Field Communication) NFC-enabled Samsung Galaxy smartphones, enhancing speed and ease in everyday transactions

CSR initiatives

Bank launched ‘Saksham Jaipur Project’ with Jaipur District Administration to distribute Digital Maternal Health Kits in 25 government hospitals.
AU Ignite – Bank’s skills training academy, till date has trained 33,000 + youth in 15 + centers across 12 districts of Rajasthan, of which 24,000 + have been linked to employment.
AU Bano Champion – Bank’s sports initiative was active at 75 + locations cross Rajasthan with 6,000 kids & youths regularly trained across 7 sports disciplines.
AU Udyogini – Bank’s women entrepreneurship, till date 5,200 + rural women were engaged and 3,210 + were nurtured under Individual Women Entrepreneurship initiative in Rajasthan & Madhya Pradesh. In addition, financial literacy camps organised for Udyogini & trained 172 women artisans at AU Nirjhari Craft Centre.
AU Kartavya – Bank’s need-based initiatives, conducted 1,145 health camps, 5 ventilators supported to Charitable Hospitals, Established AU Pathology at Sane Guruji Hospital, 4 open air gym installed, 25 computers in 5 SGPC – governed schools, educated 1,400 + students through 60 AU study centers. In addition, supported 7100 + families across 8 states with dry ration kits during crisis.

Commenting on the performance, Mr. Sanjay Agarwal, MD & CEO, AU Small Finance Bank said, “Banking sector growth remained resilient this quarter, supported by GST rationalization and festive demand, even as the deposit environment stayed highly competitive. Against this backdrop, we delivered a strong and well-rounded performance in Q3 across growth, margins, asset quality and profitability.

We further strengthened our governance by inducting three independent directors to the Board. At the same time, we are accelerating the integration of AI across our core operations and reimagining processes to transition to an AI?native architecture—built for scale, resilience and inclusion. With our core growth engines firmly in place, and a once-in-a-generation opportunity to evolve into a universal banking platform, we are well positioned to scale with purpose, responsibility and long?term sustainability”.

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