AU Small Finance Bank – Investor Presentation Summary

Key Operational Highlights

  • Deposits grew 29% YoY (8% QoQ) to ₹1,70,460 crore versus ~18% estimated banking sector growth
  • CASA deposits grew 29% YoY and 11% QoQ, with CASA ratio improving 72 bps sequentially to 29.5%
  • Cost of Funds declined 43 bps YoY and 7 bps QoQ to 6.41%
  • Loans grew 25% YoY (7% QoQ) to ₹1,53,769 crore versus ~19% estimated banking sector growth
  • Disbursements grew 33% YoY and 12% QoQ driven by broad-based growth across businesses
  • Secured business (Retail + Commercial) grew 26% YoY and 5% QoQ; Unsecured business grew 23% YoY and 8% QoQ
  • Added 45 new deposit branches and 100+ asset centers in Q2, taking total touchpoints to 3,103

Key drivers of operational performance: Strong deposit accretion, diversified loan growth across segments, expansion in distribution network, and digital adoption.

Segment-wise Performance

  • Retail Secured Assets: GLP of ₹1,00,849 crore (21.9% YoY growth), Yield 14.1%, GNPA 2.4%
  • Commercial Banking: GLP of ₹35,356 crore (38.9% YoY growth), Yield 10.3%, GNPA 0.9%
  • Inclusive Banking: GLP of ₹7,933 crore (22.8% YoY growth), Yield 25.2%, GNPA 3.3%
  • Digital Unsecured: GLP of ₹3,575 crore (23.0% YoY growth), Yield 14.2%, GNPA 1.9%
  • Others & SME: GLP of ₹6,056 crore (13.6% YoY growth), Yield 7.8%, GNPA 0.1%

Explanation of significant changes in segment performance: Commercial Banking showed strongest growth driven by Business Banking, EEFI, REG and Renewable Energy segments. Digital Unsecured showed improvement in asset quality with GNPA declining from 5.7% to 1.9% YoY.

Financial Highlights

Revenue: Not explicitly stated as single line item

Net Interest Income: ₹2,820 crore (32% YoY growth)

EBITDA: Not explicitly stated

PAT: ₹858 crore (53% YoY growth)

EPS: ₹11 (52% YoY growth)

Margins: NIM at 5.8% (expanded 33 bps YoY), Gross advance yield at 13.6%

YoY/QoQ comparison: Q2 FY27 vs Q2 FY26 - NII up 32%, PAT up 53%, Provisions down 25%; Q2 FY27 vs Q1 FY27 - NII up 5%, PAT up 8%

Drivers of financial performance: Strong loan growth, margin expansion, lower credit costs, and operational efficiency

Comparison to market estimates: Not specified

Key Risks: Not explicitly disclosed in presentation

Geographical Revenue Split

Domestic vs Export/Regional Revenue: Not specified

Regional Breakdown: Maharashtra (6%), Rajasthan (5%), Delhi (5%), Gujarat (5%), Haryana (5%), Punjab (5%), Uttar Pradesh (5%), Madhya Pradesh (5%), Karnataka (5%), Tamil Nadu (5%), Himachal Pradesh (5%), Telangana, West Bengal, Kerala, Others

Core markets contribute 16% to deposits and 61% to Gross Loan Portfolio; Urban markets contribute 84% to deposits and 39% to Gross Loan Portfolio

Balance Sheet Snapshot

Net Debt/Equity: Not explicitly stated

Reserves: Not explicitly stated

Current Assets/Liabilities: Not explicitly stated

Working Capital/Leverage Metrics: Total Liabilities ₹2,11,804 crore (28% YoY growth); Total Assets ₹2,11,804 crore (28% YoY growth)

Financial Health Insights: Tier I capital ratio at 16.8%, total CRAR at 18.5%, RWA to Total Assets at 59%

Capex & Cash Flow Health

Capital Expenditure: Not specified

Free Cash Flow: Not specified

Operating Cash Flow: Not specified

Net Debt Movement: Not specified

Investment Rationale: Ongoing investment in distribution, manpower, branding and technology

Strategic & R&D Initiatives

Investments in Innovation: AI-native banking platform with Gold Loan Agentic LOS live across 40 branches (>2,500 loans disbursed), planned expansion to 100 branches; 50+ AI use cases identified; Voice AI platform with 19 voice bots deployed

Expected impact on growth: ₹500+ crore of unsecured loans disbursed in Q2 through scorecard-led model; ₹500+ crore loans disbursed YTD through voice bots with 50% lower opex

Strategic Rationale: Digital-first approach to drive efficiency, scalability, and customer experience

Industry Trends & Business Environment

Macro/Industry Trends: Banking sector estimated growth of ~18% for deposits and ~19% for loans

Impact on Company: AU SFB outperformed sector growth in both deposits (29%) and loans (25%)

Management Commentary & Growth Outlook

Strategic Outlook: Focus on building scalable deposit franchise, digital transformation, and potential transition to Universal Bank

FY Guidance: Not explicitly provided

Market Share Targets: Current market share ~0.7% for loans and ~0.6% for deposits, indicating significant growth runway

Risks and Opportunities: Not explicitly highlighted

ESG Updates

  • Green Fixed Deposits: ₹3,280+ crore raised across 31,800+ accounts
  • ESG Ratings: Sustainalytics 16.6 (Low Risk), MSCI AA, FTSE4Good included in Emerging Indices
  • CSR Initiatives: AU Ignite trained 37,700+ youth, AU Udyogini empowered 4,238+ women entrepreneurs
  • Financial Inclusion: 5.8 lakh+ BSBD accounts, 27.1 lakh+ MUDRA loans, 44.8 lakh+ Shakti Accounts