AU Small Finance Bank delivered a robust performance for the financial year ended March 31, 2026, reporting a 25% year-on-year growth in Profit After Tax (PAT) to ₹2,641 crore. The bank saw healthy deposit growth of 23% to ₹1.52 lakh crore and a 21% expansion in its gross loan portfolio. The bank continues to focus on a retail-focused, tech-led strategy, further bolstered by its transition toward a universal bank model.
Fiscal Year 2026 Financial Highlights
The bank achieved significant profitability milestones in FY26, with PAT reaching ₹2,641 crore, reflecting a 25% year-on-year increase. For the fourth quarter alone (Jan-Mar 2026), the bank recorded a profit of ₹832 crore, a 65% year-on-year surge. Net interest income for the year stood at ₹9,113 crore, growing by 14%, while the net interest margin (NIM) for the final quarter reached 5.96%.
Assets and Liabilities Growth
AU Small Finance Bank demonstrated strong momentum in both lending and deposit mobilization. The gross loan portfolio grew to ₹1.40 lakh crore, exceeding market expectations for private banking. Growth was particularly driven by retail and commercial sectors, which rose by 23%. Simultaneously, the bank’s deposit base reached ~₹1.52 lakh crore, supported by a stable CASA ratio of 28%. The cost of funds saw a notable decline, dropping by 32 basis points for the full year to 6.75%.
Asset Quality and Operational Efficiency
Asset quality remained resilient, with gross non-performing assets (GNPA) declining by 27 basis points sequentially to 2.03% in Q4 FY26, and net NPA standing at 0.74%. The credit cost for the year improved to 0.96% of average assets compared to 1.3% in the previous year. Operational efficiency was further enhanced through technology adoption, with the bank launching an agentic AI platform and completing the core banking system migration from Fincare SFB, resulting in a single, unified architecture.
Strategic Outlook
The bank is actively progressing toward its transition into a Universal Bank, having filed its application with the regulator in March 2026. This transition is expected to provide greater access to diverse deposit sources and enhance the bank’s ability to offer its full suite of products. The bank’s distribution network continues to expand, reaching 2,790 touchpoints across 499 districts, supporting its long-term growth trajectory and commitment to a retail-focused, customer-centric business model.
Source: BSE
