AU Small Finance Bank reported a 53% year-over-year increase in profit after tax for the quarter ended Sept. 30, as net interest income rose and provisions declined alongside the earnings gain. Its board approved unaudited quarterly and half-year results on Oct. 24, and the filing included a limited-review report from joint statutory auditors.
Net interest income climbed 32% to ₹2,820 crore (₹28.2 billion) from ₹2,144 crore a year earlier. Net interest margin reached 5.8%, compared with 5.5% in the year-earlier quarter. The bank attributed the margin expansion mainly to a lower cost of funds, which fell to 6.41% from 6.83%. Gross advance yields also declined 27 basis points year over year as the portfolio mix changed, the bank said.
Net provisions were ₹359 crore, 25% below the ₹481 crore reported a year earlier. Annualized credit cost, including guarantee premium, eased to 0.8% from 1.2%.
At Sept. 30, the gross NPA ratio was 1.99% of gross advances, down from 2.41% a year earlier. The net NPA ratio was 0.81%, down from 0.88% year over year but above 0.76% at June 30. Provision coverage stood at 83%, including technical write-offs.
Deposits increased 28.6% year over year to ₹1.7046 trillion, while the gross loan portfolio expanded 25.1% to ₹1.53769 trillion. Stable deposits made up 79% of the total. Operating expenses grew 26% to ₹2,077 crore, which the bank said reflected business growth. For the first half of FY27, profit after tax rose 45% to ₹1,654 crore, and net interest income increased 32% to ₹5,516 crore.
AU Small Finance Bank Founder, Managing Director and Chief Executive Sanjay Agarwal described the quarter as one of “growth with profitability.” The bank said it had received in-principle approval from the Reserve Bank of India (RBI) to transition to a universal bank.
