AU Small Finance Bank Profit Jumps 26% To ₹668 Crore In Q3 FY26, Lower Provisions Lift Earnings

Mumbai: AU Small Finance Bank reported a 26.3 percent year-on-year rise in net profit to Rs 667.7 crore in the December quarter of FY26, aided by strong income growth and a sharp reduction in credit provisions. Total income increased 15.2 percent YoY to Rs 5,451 crore. Sequentially, profit climbed 19 percent over Q2 FY26, underlining improving operating momentum and stabilising asset quality.

For the quarter ended December 31, 2025, AU Small Finance Bank delivered a steady operational performance, with interest earned rising to Rs 4,727 crore compared with Rs 4,511 crore in Q2 FY26 and Rs 4,113 crore a year ago. Growth was driven by higher interest on advances and stable treasury income. Total income expanded to Rs 5,451 crore, up from Rs 5,224 crore in the September quarter, reflecting sustained balance-sheet expansion.

Net profit rose sequentially from Rs 560.9 crore in Q2 FY26 to Rs 667.7 crore, while profit before tax increased to Rs 884.2 crore. The improvement was supported by a 31 percent quarter-on-quarter decline in provisions, which fell to Rs 331 crore from Rs 481 crore in the preceding quarter, indicating moderation in credit costs.

Sequential growth moderates costs

Operating expenses increased 12.3 percent QoQ to Rs 1,850 crore, largely due to higher employee costs and regulatory-linked expenses, including an incremental labour-code-related impact disclosed by the bank. However, controlled interest expenses—up less than 1 percent sequentially—helped protect margins. The bank’s basic earnings per share improved to Rs 8.94, compared with Rs 7.52 in Q2 FY26.

Asset quality and capital position

Asset quality remained stable, with gross NPA at 2.30 percent and net NPA unchanged at 0.88 percent, compared with 2.41 percent and 0.88 percent respectively in the previous quarter. The capital adequacy ratio stood at 19.01 percent, well above regulatory requirements, supporting future growth.

Nine-month performance

For the nine months ended December 2025, AU Small Finance Bank reported net profit of Rs 1,809 crore, up from Rs 1,602 crore in the year-ago period, while total income rose to Rs 15,864 crore. The performance reflects consistent earnings growth, disciplined provisioning, and a resilient retail-led business model.

Disclaimer: This article is based on unaudited financial results filed by the company. Figures are rounded for readability. Investors should refer to official filings before making investment decisions.