AU Small Finance Bank has reported a resilient performance for the second quarter of FY26, despite mixed economic sentiment. The bank’s results highlight its ability to navigate challenging market conditions and maintain growth momentum.
The bank’s net profit for Q2 FY26 stood at ₹335 crore, representing a growth of 24% year-over-year (YoY). The net interest income (NII) increased by 25% YoY to ₹1,431 crore, driven by a 23% YoY growth in advances and a 14% YoY increase in deposits. The bank’s net interest margin (NIM) improved to 6.2% from 5.9% in the same quarter last year.
The bank’s asset quality remained stable, with the gross non-performing assets (GNPA) ratio at 2.1% and the net non-performing assets (NNPA) ratio at 0.6%. The provision coverage ratio (PCR) stood at 74.1%, indicating a healthy provision buffer.
The bank’s capital adequacy ratio (CAR) was at 19.3%, well above the regulatory requirement of 15%. The return on assets (ROA) improved to 2.3% from 2.1% in the same quarter last year, while the return on equity (ROE) stood at 16.1%.
The bank’s management noted that the economic sentiment remains mixed, with some sectors showing resilience while others are facing challenges. However, the bank’s diversified portfolio and strong risk management practices have helped it to maintain its growth trajectory.
The bank’s focus on digital transformation and customer-centric approach has also yielded positive results. The bank’s digital channels now account for over 80% of its transactions, and the bank has seen a significant increase in customer engagement through its mobile banking app.
Overall, AU Small Finance Bank’s Q2 FY26 performance demonstrates its ability to adapt to changing market conditions and maintain growth momentum. The bank’s strong asset quality, healthy provision buffer, and robust capital position position it well to navigate the challenges ahead. With its focus on digital transformation and customer-centric approach, the bank is likely to continue its growth trajectory in the coming quarters.