AU Small Finance Bank (AUBANK) Q4 24/25 earnings summary

Executive summary

• FY25 marked by resilience amid tight monetary policy, high inflation, and intense deposit competition, with GDP growth moderating to 6.4%.

• Achieved strong growth despite macro challenges, celebrating 30 years of operations and completing the Fincare SFB merger, with full IT integration in progress.

• Universal banking license application under review; RBI evaluation ongoing.

• Audited FY25 results approved, reflecting the impact of the Fincare SFB amalgamation from April 1, 2024.

• Dividend of ₹1 per share for FY25 recommended, subject to shareholder approval.

Financial highlights

• Deposits grew 27% YoY to ₹1.24 lakh Cr, outpacing sector growth of ~10%.

• Gross loan portfolio rose 20% YoY to ₹1.16 lakh Cr, led by retail secured (21% growth) and commercial banking (32% growth).

• Net profit for FY25 stood at ₹2,10,593 lakh; Net Interest Income up 55% YoY to ₹8,012 Cr.

• Cost to Income ratio improved to 57% in FY25 from 64% in FY24.

• Basic EPS for FY25 was ₹28.32, up from ₹22.98 in FY24; Book Value per Share up 23% YoY to ₹231.

Outlook and guidance

• No specific FY26 guidance due to macro uncertainty; expect stronger H2 as credit and funding costs decline.

• Medium-to-long-term ROA potential seen at 1.8%, with business growth 2-2.5x nominal GDP.

• Targeting high RoA assets to contribute 72-75% of the loan portfolio by FY27; currently at ~73%.

• NIMs may face pressure in H1 FY26, with improvement expected in H2 as rate cuts flow through.

• Results for FY25 are not directly comparable to prior periods due to the Fincare merger.