AU Small Finance Bank (AUBANK) Q3 25/26 earnings summary

Executive summary

• Q3 FY26 marked 35 quarters of operations, with strong conviction in scaling responsibly as the bank transitions toward a universal banking platform.

• Achieved strong Q3'FY26 performance with 26% YoY PAT growth to ₹668 Cr, RoA at 1.6%, and RoE at 14.3%.

• Strategic initiatives included new product launches for chartered accountants and women, expanded distribution, and onboarding new brand ambassadors.

• Leadership changes and succession planning were implemented to deepen governance and reduce key-person dependency.

• Technology and AI investments are driving operational efficiency and digital engagement.

Financial highlights

• Deposits grew 23.3% YoY to ₹1,38,415 Cr, outpacing system growth at 1.8x; loan portfolio up 19.3% YoY.

• Net profit for Q3 FY26 was ₹66,766 lakh, up from ₹52,845 lakh in Q3 FY25; PAT for Q3 was INR 668 crore.

• Margins expanded 25 bps QoQ to 5.7%, driven by a 22 bps decline in cost of funds and CRR cut benefits.

• GNPA ratio declined 11 bps to 2.3%; annualized credit cost for Q3 fell 41 bps to 78 bps of average assets.

• Net interest income rose 16% YoY and 9% QoQ to ₹2,341 Cr; core other income up 22% YoY.

Outlook and guidance

• Loan growth targeted at 2.25–2.5x nominal GDP, aiming for 20–22% growth in the coming year.

• Credit cost guidance for FY26 maintained at 1% of average assets.

• Cost-to-income ratio expected to remain below 60%, ideally 56–57% for the next year.

• ROA target of 1.8% on a sustainable basis by FY27.

• Received in-principle RBI approval for transition to Universal Bank, valid for 18 months, requiring promoter share transfer to a NOFHC.