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

Executive summary

• Q3 FY26 marked 35 quarters of operations with strong conviction for future growth, supported by a favorable macro environment, stable leadership, and tech-driven execution.

• Achieved 26% YoY and 19% QoQ PAT growth to ₹668 Cr; RoA at 1.6%, RoE at 14.3%.

• Board approved unaudited financial results, with strategic organizational changes including leadership realignment and succession planning.

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

• Strategic initiatives included new product launches, expanded distribution, and strengthened governance.

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 interest margin expanded 25 bps QoQ to 5.7%; cost of funds declined 22 bps to 6.61%.

• Net profit for Q3 FY26 was ₹66,766 lakh, up from ₹52,845 lakh in Q3 FY25; PAT up 29% YoY.

• Credit cost for Q3 at 78 bps; GNPA at 2.30%, NNPA at 0.88%.

• Capital adequacy ratio at 19.01% as of December 31, 2025.

Outlook and guidance

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

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

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

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

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