AU Small Finance Bank Q2 PAT Up 53% YoY

Q2 FY27 Financial Performance

Profitability Metrics:

Net Interest Income (NII) grew 32% YoY to ₹2,820 crore compared to ₹2,144 crore in Q2 FY26
Net Interest Margin (NIM) increased 33 bps YoY to 5.8% from 5.5% in Q2 FY26
Cost of Funds declined 43 bps YoY to 6.41% from 6.83% in Q2 FY26
Core other income grew 16% YoY to ₹736 crore from ₹634 crore in Q2 FY26, driven by fees from credit card and transaction banking
Core Pre-Provisioning Operating Profit (PPoP) grew 31% YoY to ₹1,480 crore from ₹1,131 crore in Q2 FY26
Net Provisions declined 25% YoY to ₹359 crore from ₹481 crore in Q2 FY26
Credit cost (including guarantee premium) declined 45 bps YoY from 1.2% to 0.8%
Profit After Tax (PAT) grew 53% YoY to ₹858 crore from ₹561 crore in Q2 FY26
Return on Assets (RoA) stood at 1.7% compared to 1.4% in Q2 FY26
Return on Equity (RoE) stood at 16.1% compared to 12.4% in Q2 FY26
Total Operating Expenses grew 26% YoY to ₹2,077 crore from ₹1,647 crore in Q2 FY26
Cost to assets (excluding guarantee premium) declined 10 bps to 3.9% from 4.0% in Q2 FY26

Balance Sheet Growth:

Total deposits grew 28.6% YoY and 8.1% QoQ to ₹1,70,460 crore from ₹1,32,509 crore in Q2 FY26 and ₹1,57,727 crore in Q1 FY27
CASA deposits grew 29.1% YoY and 10.8% QoQ to ₹50,289 crore from ₹38,963 crore in Q2 FY26 and ₹45,399 crore in Q1 FY27
Current account deposits grew 55% YoY to ₹11,693 crore from ₹7,562 crore in Q2 FY26
Savings deposits grew 23% YoY to ₹38,595 crore from ₹31,401 crore in Q2 FY26
Stable deposits (CASA + Retail TD + Non-callable Bulk TD) form 79% of total deposits
Gross loan portfolio stood at ₹1,53,769 crore, registering 25.1% YoY growth from ₹1,22,877 crore and 6.6% QoQ growth from ₹1,44,250 crore in Jun 2026
Gross advances stood at ₹1,50,291 crore, up 27.9% YoY from ₹1,17,525 crore and 7.0% QoQ from ₹1,40,461 crore
Secured loan portfolio (Retail + Commercial) grew 25.9% YoY
Unsecured businesses (MFI, Credit Card and PL) grew 22.9% YoY
CD ratio (after adjusting for refinance from DFIs) stands at 80% vs 81% in Q2 FY26
Average LCR for the quarter was 116% compared to 119% in Q1 FY27 and Q2 FY26

Asset Quality:

GNPA ratio improved 42 bps YoY to 1.99% from 2.41% in Q2 FY26
NNPA ratio improved 7 bps to 0.81% from 0.88% in Q2 FY26
PCR stood at 83% including technical write-off
Collection efficiency in non-overdue MFI loans was 99.6% in Q2 FY27 vs 99.5% in Q1 FY27

H1 FY27 Financial Performance

Net Interest Income (NII) grew 32% YoY to ₹5,516 crore compared to ₹4,189 crore during H1 FY26
Net Interest Margin (NIM) for H1 FY27 stood at 5.8% compared to 5.4% in H1 FY26
Core Pre-Provisioning Operating Profit (PPoP) grew 36% YoY to ₹2,906 crore compared to ₹2,143 crore in H1 FY26
PAT grew 45% YoY to ₹1,654 crore compared to ₹1,142 crore during H1 FY26
Return on Asset (RoA) stood at 1.7% compared to 1.4% for H1 FY26
Return on Equity (RoE) stood at 15.8% compared to 12.9% for H1 FY26

Business and Operational Updates

Distribution Network:

Present in 21 states and 4 UTs with 3,103 physical touchpoints
Added net 183 touchpoints in Q2, including 45 new liability branches, 100+ asset centres, and 39 BO/BC and unbanked centres
Serves 128 lac+ customers with ~61,000 employees

Technology and Digital Adoption:

46+ lac registered users on AU 0101 with 19.4 lac Monthly Active Users (MAUs)
>95% of transactions done digitally
25K+ sales management app users
60%+ straight-through customer onboarding
~5% of Q2 disbursements via cross-sell lead platform
Gold Loan Agentic LOS live across 40 branches with more than 2.5k loans disbursed
₹500+ crore of unsecured loans disbursed in Q2 through scorecard led model
>50% AML alerts auto resolved by the system
19+ voice bots deployed with ₹500 crore+ loans disbursed YTD at 50% lower opex

Leadership Updates:

Mr. Anil Agarwal joined as Senior Executive Group Head – Commercial & Institutional Banking
Mr. Amol Padhye formally assumed role of Chief Risk Officer

Credit Rating Updates:

ICRA upgraded long-term credit rating outlook to 'Positive' from 'Stable' while reaffirming long-term rating at AA
Fixed deposit programme rated AA+/Stable by CRISIL Ratings
Long-term credit/subordinated debt/Tier II Bonds rated 'AA/Stable' by CRISIL and CARE
Certificate of deposit programme rated 'A1+' by CRISIL, CARE and India Ratings

Key Milestones:

Received SEBI approval for providing UPI Sponsorship Services under ASBA framework for IPOs and Public Issues
Wheels vehicle-finance business crossed ₹50,000 crore in GLP in August 2026, accounting for approximately one-third of Bank's Gross Loan Portfolio
Inclusive banking vertical crossed 1,000 branches, serving over 20 lakh customers across 59,000+ villages
Won 'Overall Performance Bank' award in SFB category at ASSOCHAM's 21st Annual Summit
Recognized among Asia's Best Workplaces™ 2026 by Great Place to Work®, ranking #54 in Asia in Large Category
Received BFSI Guild Award for Excellence in Voice AI-Powered Customer Acquisition

CSR & Sustainability:

Launched Sustainable Finance Framework validated by Moody's with SQS2 score
AU Foundation's Udyogini initiative recognized by Government of Rajasthan for women's entrepreneurship contribution

Management Commentary

Mr. Sanjay Agarwal, Founder, MD & CEO commented: "This quarter's performance is a reflection of the institution we are steadily building, one that combines growth with profitability, and ambition with prudence. The balanced growth of our franchise, improving profitability and stable asset quality reinforce our confidence that the foundations for sustained, long-term performance are firmly in place."

Financial Tables Summary

Profit & Loss Statement (₹ crore):

| Q2 FY27 | 2,820 | 32% | 858 | 53% |

| H1 FY27 | 5,516 | 32% | 1,654 | 45% |

Balance Sheet (₹ crore):

| Item | Sep 2026 | Sep 2025 | YoY Growth | Jun 2026 | QoQ Growth |

| Deposits | 1,70,460 | 1,32,509 | 29% | 1,57,727 | 8% |

| Gross Loan Portfolio | 1,53,769 | 1,22,877 | 25% | 1,44,250 | 7% |

| Total Assets | 2,11,804 | 1,65,542 | 28% | 1,97,125 | 7% |