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Informist, Saturday, Jul. 25, 2026

 

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--AU Small Finance Bank Apr-Jun net profit INR 7.96 bln 
--Analysts saw AU Small Finance Bank Apr-Jun net profit at INR 7.97 bln 
--AU Small Finance Bank Apr-Jun total income INR 59.92 bln 
--AU Small Fin Bk Apr-Jun net profit INR 7.96 bln vs INR 5.81 bln year ago 
--AU Small Fin Bk Apr-Jun total income INR 59.92 bln vs INR 51.89 bln yr ago 
--AU Small Fin Bank promotes Yogesh Jain to deputy CEO from Sat 
--AU Small Finance Bk Apr-Jun provisions INR 3.71 bln vs INR 5.33 bln yr ago 
--AU Small Finance Bank gross NPA ratio 2.10% on Jun 30 vs 2.03% qtr ago 
--AU Small Finance Bank net NPA ratio 0.76% on Jun 30 vs 0.74% qtr ago 
--AU Small Finance Bank Basel-II capital adequacy ratio 18.93% on Jun 30 
--AU Small Fin Bank Apr-Jun net interest margin 5.9%, up 47 bps on yr 
--AU Small Fin Bank Apr-Jun NII INR 26.95 bln, up 32% on year 
--AU Small Finance Bank provision coverage ratio 85% on Jun 30 
--AU Small Fin Bk Apr-Jun yield on gross advances 13.7% vs 14.1% year ago 
--AU Small Fin Bk: Gross loans at INR 1.44 tln on Jun 30, up 3% QoQ 
--AU Small Fin Bk Apr-Jun slippages INR 7.98 bln, down 22% on year
--AU Small Fin Bk: Deposits at INR 1.58 tln on Jun 30, up 24% on year 
--AU Small Finance Bank: CASA ratio 29% on Jun 30 
--AU Small Fin Bk Apr-Jun cost of funds 6.48%, down 60 bps on year 
--AU Small Fin Bk Q1 pre-provision operating profit INR 14.26 bln, up 41% YoY 

 

By Cassandra Carvalho and Kabir Sharma

 

MUMBAI – A sizeable year-on-year fall in provisions helped AU Small Finance Bank match analysts' expectations of its net profit for the June quarter even after its on-year growth in expenses beat the growth in income. The bank's provisions fell on year for the third consecutive quarter but rose sharply sequentially. A fall in other income ate into the bank's total income, which was otherwise robust with growth in interest earned at a five-quarter high.

 

The lender Saturday reported a net profit of INR 7.96 billion for the June quarter, largely in line with the average of estimates from 10 brokerages of INR 7.97 billion. Its bottom line rose 37% on year but fell over 4% on quarter. Its provisions and contingencies fell 30% on year to INR 3.72 billion but rose nearly 38% sequentially.

 

Provisions fell owing to "normalisation" of the small finance bank's unsecured loan book, it said in the presentation for investors. The lender's first-quarter provisions included an additional one-time provision of INR 230 million to boost provision buffers for exposure to microfinance, personal and business loans, two-wheeler loans, and the emerging enterprises and financial institutions segments, it said. Its pre-provisioning operating profit for the quarter was INR 14.35 billion, up 9% on year, the bank said.

 

The lender's net interest income for the quarter was INR 26.95 billion, marginally higher than the average of estimates of INR 26.84 billion. Its total income rose more than 15% on year to INR 59.92 billion, notching a small rise of 4% from the trailing quarter. Of this, interest earned rose 21% on year to INR 53.03 billion. The other income fell nearly 15% on year and 6% on quarter to INR 6.89 billion. The bank's other income had fallen on year in the March quarter as well. 

 

The bank posted a net interest margin of 5.9% in the reporting quarter, down slightly from 6.0% in the March quarter. Its yield on gross advances also slipped to 13.7% in Apr-Jun from 14.1% in the year-ago quarter. However, its cost of funds fell sharply to 6.48% from 7.08% in the year-ago period. The bank's gross loan portfolio grew 23% on year and 3% on quarter to INR 1.44 trillion.

 

The bank reported 22% year-on-year decline in fresh slippages in the June quarter while deposits continued to register robust growth, reflecting healthy business momentum despite a marginal sequential uptick in bad loan ratios. Fresh slippages during the quarter stood at INR 7.98 billion, down from around INR 10.2 billion in the year-ago quarter. The bank's provisions also declined sharply to INR 3.71 billion in the first quarter from INR 5.33 billion in the corresponding period last year.

 

The lender's pre-provision operating profit for the June quarter rose 41% on year to INR 14.26 billion, supported by steady operating performance. On the liabilities front, total deposits increased 24% year-on-year to INR 1.58 trillion as of Jun. 30. The bank's current account savings account ratio stood at 29% at the end of June. Its cost of funds eased to 6.48% during the quarter, down 60 basis points from a year earlier, indicating an improvement in funding costs.

 

Asset quality remained broadly stable, although key bad loan ratios inched up sequentially. The gross non-performing asset ratio stood at 2.10% as of Jun. 30, compared with 2.03% at the end of March. The net non-performing asset ratio rose marginally to 0.76% from 0.74% in the previous quarter.

 

Despite the slight increase in non-performing assets, the bank maintained a strong provision coverage ratio of 85% as of Jun. 30. Separately, AU Small Finance Bank said it has promoted Yogesh Jain to deputy chief executive officer, with the appointment taking effect Saturday. The move comes as the lender continues to strengthen its senior leadership team amid sustained business growth. On Friday, AU Small Finance Bank shares had ended at INR 1,004.00 on the NSE, up 2.6% from Thursday.  End

 

Edited by Rajeev Pai

 

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