AU Small Finance Bank Q1 Results: Net Profit Up 16%, Asset Quality Sours

AU Small Finance Bank Ltd. on Saturday reported a 16% uptick on year-on-year basis in standalone net profit during the first quarter of fiscal 2026. The bank saw a bottomline of Rs 581 crore compared to Rs 503 crore in the year ago period, according to a stock exchange filing.

The company's net interest income was up 6% to Rs 2,045 crore quarter compared to Rs 1,921 crore a year ago.

The total income was up at Rs 5,189 crore during the June 2026 quarter from Rs 4,278 crore in the same period last year, AU Small Finance Bank said in a regulatory filing.

The bank's asset quality saw deterioration. Its gross non-performing assets rose to 2.47% of gross advances at the end of the June quarter, from 1.78% a year ago. It was 2.28% in the March quarter. The lender's net NPAs or bad loans also went up to 0.88% against 0.63% in the year-ago period and 0.74% in the previous quarter.

Interest earned by the bank improved to Rs 4,378 crore compared to Rs 3,769 crore in the June quarter of fiscal 2025. The bank's operating profit also increased to Rs 1,312 crore from Rs 952 crore in the year-ago period.

The bank's operating profit also increased to Rs 1,312 crore from Rs 952 crore in the year-ago period.

Gross loan portfolio grew 18% to Rs 1,17,624 crore compared to Rs 99,792 crore as of first quarter fiscal 2025, it said.

Provisions and contingencies almost doubled to Rs 533 crore during the first quarter compared to Rs 283 crore a year ago. Provision Coverage Ratio stood at 83% at the end of June 2025.

However, the capital adequacy ratio of the bank declined to 19.42% from 20.11% in the same quarter of Fiscal 2025.

Commenting on quarterly numbers, AU Small Finance Bank managing director and chief executive officer Sanjay Agarwal said, "We have reported another set of consistent performance in a seasonally soft quarter, showing sustainable growth in deposits, assets, and profitability".

As the economic cycle strengthens, AU is well-positioned to navigate near-term uncertainties while staying committed to the long-term vision of building a forever bank that can truly scale with sustainability, he added.

(With PTI Inputs)