AU Small Finance Bank Ltd has reported its results for the Q4, with net profit rising 65.1 per cent year-on-year to Rs 831.4 crore, compared with Rs 504 crore in the same period last year. For FY26, net profit stood at Rs 2,641 crore, up 25 per cent from Rs 2,106 crore in FY25.
Net interest income grew 23.3 per cent year-on-year to Rs 2,582.3 crore from Rs 2,093.9 crore, supported by a 24 basis points expansion in net interest margin to 5.96 per cent from 5.70 per cent in the previous quarter. Provisions declined to Rs 269 crore in Q4 FY26 from Rs 635.11 crore a year ago, falling 58 per cent year-on-year and 19 per cent sequentially.
Asset quality improved sequentially, with gross non-performing assets declining to Rs 2,755.6 crore from Rs 2,880.5 crore in the previous quarter and net non-performing assets reducing to Rs 989.9 crore from Rs 1,091.5 crore. In percentage terms, gross NPA stood at 2.03 per cent compared to 2.30 per cent quarter-on-quarter, while net NPA came in at 0.74 per cent compared to 0.88 per cent.
Cost of funds declined 12 basis points sequentially to 6.49 per cent. Core other income increased 14 per cent year-on-year and 7 per cent quarter-on-quarter to Rs 748 crore, while overall other income stood at Rs 731 crore, down 4 per cent year-on-year but up 1 per cent sequentially.
Operating expenses rose 26 per cent year-on-year and 6 per cent quarter-on-quarter to Rs 1,962 crore. The cost-to-income ratio improved to 59.2 per cent in Q4 FY26 from 59.7 per cent in Q3 FY26, excluding exceptional items. Pre-provisioning operating profit increased 5 per cent year-on-year and 11 per cent sequentially to Rs 1,352 crore.
Return on assets stood at 1.8 per cent for Q4 FY26 and 1.6 per cent for FY26, while return on equity was 17.0 per cent for the quarter and 14.2 per cent for the full year. Cost-to-assets ratio declined to 4.1 per cent in FY26 from 4.3 per cent in FY25, excluding the CGFMU premium.
Total deposits grew 23 per cent year-on-year and 10 per cent quarter-on-quarter to Rs 1,52,661 crore, while CASA deposits increased around 20 per cent year-on-year and nearly 9 per cent sequentially. Gross loan portfolio grew 21 per cent year-on-year and 8 per cent quarter-on-quarter to Rs 1,40,327 crore. Secured businesses rose 23 per cent year-on-year and 7 per cent sequentially.
Unsecured businesses grew 7 per cent sequentially but declined 1 per cent year-on-year. Credit cost improved to 0.96 per cent of average assets in FY26 from 1.3 per cent in FY25, and stood at 1 per cent including CGFMU premium.
During Q4 FY26, the bank added 64 physical touchpoints, including 13 new deposit branches, taking the total network to 2,790. The bank also appointed Gaurav Jain as Chief Financial Officer, effective April 27, 2026.
Sanjay Agarwal, Founder, MD & CEO, AU Small Finance Bank, said, “It takes at least a decade to build the foundation of a strong bank and entering our tenth year is a deeply meaningful milestone for all of us at AU. Building a Forever Bank demands consistency in strategy, in execution and in values. FY2026 reflects exactly that.
We have strengthened our franchise, embedded technology into our core, and invested in every dimension that matters, like governance, leadership, distribution and scale. This month, we launched our first Agentic AI platform and our first AI-native Loan Origination System on that platform, signalling our intent to fundamentally reimagine banking. I am genuinely excited about what lies ahead and look forward to sharing more in the quarters to come.”
Shares of AU Small Finance Bank Ltd ended at Rs 1,043.45, down by Rs 22.15, or 2.08 per cent, on the BSE.
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