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

Executive summary

• Achieved strong growth in FY25 despite challenging macroeconomic conditions, including moderated GDP growth, tight liquidity, and elevated interest rates, while celebrating 30 years of operations and completing the Fincare SFB merger with full IT integration in progress.

• Application for a universal banking license is under review by the RBI, with expectations for a decision within the calendar year.

• Strategic focus remains on building a retail-centric, granular business model, with continued investment in digital, product, and distribution capabilities.

• Audited financial results for FY25 reflect the impact of the Fincare SFB amalgamation from April 1, 2024.

• Appointment of Mr. Nandkumar Saravade as Non-Executive Independent Director for a 3-year term effective May 31, 2025.

Financial highlights

• Deposit base grew 27% year-over-year to ₹1.24 lakh crore, outpacing sector growth, and loan portfolio rose 20% year-over-year to ₹1.16 lakh crore, led by secured retail and commercial banking segments.

• Net Interest Income increased 55% year-over-year to ₹8,012 crore; Net Profit (PAT) up 32% to ₹2,106 crore; PPOP grew 86% to ₹4,581 crore.

• Cost to Income ratio improved to 57% from 64% year-over-year.

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

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

Outlook and guidance

• No specific guidance for FY26 due to macro uncertainties, but confidence in continued strong performance, with H2 expected to be stronger as credit costs and cost of funds decline.

• Targeting high RoA assets to contribute 72-75% of the loan portfolio by FY27; aiming for RoA of 1.8% and cost to income ratio below 60% by FY27.

• Credit cost expected to normalize to 75-85 basis points over the long term, with FY26 likely at the higher end due to residual stress in unsecured segments.

• Focus on expanding product presence within existing branches and leveraging digital channels for growth.

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