AU Small Finance Bank Limited – Investor Presentation Summary

Key Operational Highlights

  • Gross Loan Portfolio (GLP) stood at ₹144,000 crore as of 30th Jun'26, a 23% YoY increase from ₹118,000 crore.
  • Retail Banking vertical forms ~74% of total loan assets; ~90% of total business is secured.
  • The bank has a pan-India distribution with ~2900 touchpoints.
  • Key drivers include scaling core retail & commercial banking, scaling newer businesses (MFI, Gold, PL/BL, CC) from a low base, and expansion of asset franchise to newer states (AP, TL, TN, KA, UP, WB, BH/JH, OD).

Segment-wise Performance

Breakdown of customer assets (All figures in ₹ '000 cr.) as of 30th Jun'26:

  • Consumer Assets: ₹66,000 (Up 14% YoY)
  • Mortgages (Retail): ₹43,000 (Up 12% YoY)
  • Auto (Cars, 2W) (Retail): ₹20,000 (Up 21% YoY)
  • Credit Cards (Retail): ₹2,000 (Down -3% YoY)
  • PL, BL (Retail): ₹1,000 (Up 24% YoY)
  • Commercial Assets: ₹56,000 (Up 33% YoY)
  • Commercial Vehicles (CV/CE/3W/Taxi) (Retail): ₹23,000 (Up 33% YoY)
  • Business Banking (MSME) (Commercial): ₹19,000 (Up 20% YoY)
  • EE&FI (Commercial): ₹6,000 (Up 41% YoY)
  • REG (Commercial): ₹5,000 (Up 54% YoY)
  • Renewable Energy (Commercial): ₹3,000 (Up 123% YoY)
  • Rural Assets: ₹18,000 (Up 38% YoY)
  • MFI (Retail): ₹7,000 (Up 15% YoY)
  • Tractor finance (Retail): ₹6,000 (Up 32% YoY)
  • Gold loan (Retail): ₹5,000 (Up 130% YoY)
  • Others: ₹4,000 (Down -10% YoY)
  • Total customer assets: ₹145,000 (Up 23% YoY), including credit substitutes of ₹1,000.

Financial Highlights

  • NII: CAGR of 31% from FY18 to FY26.
  • PPoP (% of Avg. Total Assets): 9.1% in Q1FY27 vs 8.0% in FY26.
  • Credit Costs (% of Avg. Total Assets): 0.8% in Q1FY27; 9-year average is ~0.7 bps.
  • Profitability: 9-year average RoA of ~1.6%; RoE of ~14.4%.
  • Drivers of financial performance: Scale led operating leverage, efficiency and productivity gains from tech and AI-led automation.

Geographical Revenue Split

Not Specified

Balance Sheet Snapshot

Not Specified

Capex & Cash Flow Health

  • The bank has cumulatively invested ₹3,000+ Cr in technology.
  • It plans to invest 8–10% of opex in technology and skills every year.

Strategic & R&D Initiatives

Investments in Innovation:

  • Tech Strategy: Built on four pillars: Run (Resilient Core), Build (Digital Experiences), Transform (Data, Analytics & AI), Secure (Resilience & Trust).
  • Digital Platforms: AU 0101 Super App for consumers and AU 0101 Business for corporates.
  • AI & Data: Building an Agentic AI platform with 50+ use cases in development. Key initiatives include a Credit Agent, Fraud & Risk Agent, and Voice AI.
  • Key Outcomes: 99.9% uptime for critical apps, 200+ Open Banking APIs, 70% cloud footprint, <300ms latency.

Expected impact on growth:

  • Tech-led distribution and cross-sell accelerating revenue growth.
  • Automation and AI lowering cost-to-income every year.
  • Target of 10M+ digital customers, >80% digital STP, and 50%+ AI-handled calls.

Strategic Rationale: Transform AU Bank into India's most technologically advanced bank, delivering superior customer experience, operational excellence and sustainable growth.

Industry Trends & Business Environment

Macro/Industry Trends:

  • Ease of business through lowering of PSL requirement to 40%.
  • Larger addressable market due to removal of ticket size restriction (e.g., Mortgages).
  • Stronger brand driving wider counterparty acceptance (e.g., trade finance and cross border).

Impact on Company: These factors contribute to a larger addressable market and support the bank's sustainable growth target of 2.0 – 2.5x Nominal GDP.

Management Commentary & Growth Outlook

Strategic Outlook: The presentation emphasizes a "Sustainable Business Model | Retail Focused | Tech-Led | Customer Centric | Well-Governed."

FY Guidance: The bank targets sustainable growth at 2.0 – 2.5x Nominal GDP. Credit cost is expected to remain within the long-term range adjusted for portfolio mix.

Risks and Opportunities: Asset quality trends are holding up, anchored by a high proportion of secured book (90%+).