AU Small Finance Bank reported a 37% year-on-year increase in net profit after tax (PAT) to ₹796 crore for the quarter ended June 30, 2026, driven by robust growth in net interest income (NII) and improved asset quality. The bank’s NII surged 32% YoY to ₹2,695 crore, while the net interest margin (NIM) expanded by 47 basis points to 5.9%, reflecting effective yield management despite a 60 bps decline in cost of funds to 6.48%. Total income rose 19% YoY to ₹3,385 crore, underscoring the bank’s ability to sustain profitability amidst tighter liquidity conditions. This performance positions the bank strongly ahead of its 31st Annual General Meeting (AGM), scheduled for September 5, 2026.

The Board of Directors approved the unaudited financial results on July 25, 2026, under Regulation 30 and Regulation 51 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Joint statutory auditors M S K A & Associates LLP and Mukund M. Chitale & Co. issued an unmodified limited review report. In a significant leadership move, the Board elevated Yogesh Jain from Chief Operating Officer to Deputy CEO effective July 25, 2026, to strengthen management bandwidth. Additionally, Yogesh Soni was categorized as Senior Management Personnel (SMP), while Bhaskar Karkera, Vaman Ramesh Kamat, Vivek Rathi, Dhavan Natvarlal Shah, and Ankur Tripathi were re-categorized from SMP to non-SMP. Deepak Jain will be re-categorized upon completing his term as Chief Risk Officer on September 1, 2026. The record date for determining members eligible for the final dividend is Friday, July 31, 2026.

Key Financial Metrics

The following table summarizes the bank’s key financial performance for the quarter:

Balance Sheet Growth

Deposits grew 24% YoY to ₹1,57,727 crore, with CASA deposits increasing 22% YoY to ₹45,399 crore, maintaining a stable CASA ratio of 29%. The gross loan portfolio expanded 23% YoY to ₹1,44,250 crore, supported by a 42% YoY rise in disbursements. Secured businesses (Retail + Commercial) led this growth with a 25% YoY increase, while unsecured businesses grew 11% YoY. The credit deposit ratio stood at 80%, excluding advances created from refinance by Development Finance Institutions. During the quarter, the bank allotted 7,04,837 equity shares pursuant to employee stock option exercises.

Asset Quality and Capital

Asset quality showed a mixed picture — while annual trends improved, sequential metrics reflected a marginal uptick. The gross NPA (GNPA) ratio stood at 2.10% in Q1FY27, compared to 2.47% in Q1FY26 on a YoY basis, but edged up from 2.03% on a quarter-on-quarter basis. Similarly, the net NPA (NNPA) ratio improved to 0.76% from 0.88% YoY, but rose marginally from 0.74% QoQ. Slippages declined 22% YoY to ₹798 crore, and provisions fell 30% YoY to ₹371 crore. The capital adequacy ratio remained robust at 18.9%, with Tier I capital at 17.1%.

Segment Performance

Retail banking remained the primary revenue driver, contributing ₹4,45,030 lakh to segment revenue, up from ₹3,65,189 lakh in Q1FY26. Wholesale banking revenue rose to ₹64,710 lakh from ₹47,950 lakh YoY. Treasury segment revenue decreased to ₹80,105 lakh from ₹98,024 lakh, reflecting market headwinds. Retail banking also delivered the highest segment result at ₹66,425 lakh, compared to ₹27,020 lakh in the same period last year.

What the Numbers Show

The divergence between the 32% surge in NII and the 26% rise in operating expenses highlights improving operating leverage, contributing to a 41% YoY jump in core pre-provisioning operating profit (excluding treasury income). While total other income declined 15% YoY due to treasury headwinds, core other income grew 33% YoY, indicating stronger fee-based revenue streams. The simultaneous improvement in NIM and decline in cost of funds suggests successful liability management, allowing the bank to pass on lower funding costs partially to borrowers while retaining margin expansion. The marginal sequential rise in GNPA and NNPA ratios, however, warrants continued monitoring of credit quality trends.

AU Small Finance Bank has published the audio recording of its conference call with analysts and investors, which was held on July 25, 2026. The discussion focused on the bank’s unaudited financial results for the quarter ended June 30, 2026. This release ensures that stakeholders who could not attend the live session can access the management’s commentary and responses regarding the latest quarterly performance.

The disclosure is made in accordance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The bank notified both the National Stock Exchange of India Ltd. and BSE Limited of this development via a letter dated July 25, 2026, bearing reference number AUSFB/SEC/2026-27/156. This follows an earlier communication dated July 14, 2026, which announced the scheduling of the conference call.

Disclosure Details

The audio recording is accessible to the public on the bank’s official website under the investor relations section. The specific link provided for accessing the recording is https://www.au.bank.in/investors/quarterly-reports .

The submission was signed by Manmohan Parnami, the Company Secretary and Compliance Officer of AU Small Finance Bank Limited. His membership number is F9999. The registered office of the bank is located at 19-A Dhuleshwar Garden, Ajmer Road, Jaipur, Rajasthan.

What This Means for Investors

While this filing does not contain new financial figures, it serves as a critical compliance step following the initial announcement of quarterly results. Investors are advised to review the recording for any forward-looking statements or clarifications provided by management during the Q&A session. The availability of the recording supports transparency and allows for a detailed review of the bank’s strategic direction and operational updates for Q1FY27.