AU Small Finance Bank reported a 65 per cent year-on-year surge in net profit to ₹832 crore for the January-March quarter of FY26, capping a year in which annual profit rose 25 per cent to ₹2,641 crore. The stock closed at ₹1,043 on April 27, 2026, down 2.13 per cent on the day, giving the bank a market capitalisation of approximately ₹77,867 crore.

The Jaipur-based lender also disclosed it has formally filed an application with the Reserve Bank of India for a final universal bank licence, following an in-principle approval received in 2025. RBI separately approved the re-appointment of founder Sanjay Agarwal as Managing Director and CEO for three years from April 19, 2026.

Net interest income for the March quarter grew 23 per cent year-on-year to ₹2,582 crore, while net interest margin expanded 24 basis points sequentially to 5.96 per cent. For the full year, NIM stood at 5.65 per cent, compared with 5.94 per cent in FY25, reflecting the impact of rate cuts earlier in the year. Return on assets improved to 1.8 per cent for the quarter and 1.6 per cent for the full year, while return on equity reached 17 per cent in Q4.

Asset quality improved materially. Gross NPA ratio fell to 2.03 per cent from 2.30 per cent in the previous quarter, while net NPA stood at 0.74 per cent. Credit costs for Q4 declined sharply to 0.6 per cent of average assets. The gross loan portfolio grew 21 per cent year-on-year to ₹1.40 lakh crore, outpacing an estimated 13 per cent growth in the private banking sector. Deposits rose 23 per cent to ₹1.52 lakh crore over the same period.

Cost-to-asset ratio excluding CGFMU premium declined to 4.1 per cent in FY26 from 4.3 per cent in FY25, aided by AI-led process automation. The bank completed the core banking migration of Fincare SFB during the quarter and launched an AI-native gold loan origination platform. The board declared a dividend of ₹1 per share for FY26, subject to shareholder approval.

Published on April 27, 2026