Earnings Review
AU Small Fin Bank's net profit falls for 1st time in 6 qtrs
This story was originally published at 17:26 IST on 17 October 2025
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--AU Small Finance Bank Jul-Sept net profit INR 5.61 bln
--Analysts saw AU Small Finance Bank Jul-Sept net profit INR 5.20 bln
--AU Small Fin Bk Jul-Sept net profit INR 5.61 bln vs INR 5.71 bln year ago
--AU Small Fin Bk Q2 total income INR 52.24 bln vs INR 45.49 bln yr ago
--AU Small Fin Bk reappoints Sanjay Agarwal as MD, CEO for 3 yrs from Apr 19
--AU Small Finance Bk Jul-Sept provisions INR 4.81 bln vs INR 3.73 bln yr ago
--AU Small Finance Bank gross NPA ratio 2.41% as on Sept 30 vs 2.47% qtr ago
--AU Small Finance Bank net NPA ratio 0.88% on Sept 30, unch from qtr ago
--AU Small Finance Bank Basel-II capital adequacy ratio 18.78% as on Sept 30
--AU Small Fin Bk Apr-Sept net profit INR 11.42 bln vs INR 10.74 bln year ago
--AU Small Fin Bk H1 total income INR 104.13 bln vs INR 88.27 bln yr ago
--AU Small Fin Bank Jul-Sept net interest margin 5.5% vs 6.1% year ago
--AU Small Fin Bank Jul-Sept net interest margin 5.5% vs 5.4% qtr ago
--AU Small Fin Bank Jul-Sept NII INR 21.44 bln vs INR 19.74 bln year ago
By Shubham Rana
NEW DELHI – AU Small Finance Bank Ltd.'s net profit fell for the first time in six quarters with higher provisions weighing on the bottom line in the September quarter. Despite the fall, the September quarter net profit was higher than the Street view. The last time the bank's net profit fell on year was in Jan-Mar 2024.
The lender's net profit fell 1.8% on year to INR 5.61 billion for the September quarter. Sequentially, the net profit was down 3.4%. Analysts had estimated the net profit falling to INR 5.20 billion.
Provisions rose 29% on year to INR 4.81 billion in the September quarter. Sequentially, provisions were down 9.8%.
Total income of the bank rose 15% on year to INR 52.24 billion in the September quarter. At 15%, the rise in total income is the slowest in 15 quarters. Interest earned rose 15% on year, the slowest in 17 quarters, to INR 45.11 billion. Other income was up 12% on year at INR 7.13 billion, driven by higher fee income and third-party product distribution.
Total expenses grew 17% on year to INR 40.14 billion in the September quarter, led by a rise in interest expenses, which rose 22% to INR 23.67 billion. Employee cost increased 17% on year to INR 9.19 billion, adding to total expenses.
The bank's net interest income grew 9% on year to INR 21.44 billion in the September quarter. Analysts had expected the net interest income to rise to INR 20.71 billion.
Net interst margin fell to 5.5% in the September quarter from 6.1% a year ago. The margin was 5.4% in the June quarter. Cost of funds declined 25 basis points on quarter to 6.83% in Jul-Sept.
The bank's asset quality worsened from a year ago with gross non-performing asset ratio rising to 2.41% by end-September from 1.98% a year ago. Gross NPA ratio was 2.47% as on Jun. 30. Net NPA ratio was 0.88% as on Sept. 30, up from 0.75% a year ago but unchanged from a quarter ago. The Basel-II capital adequacy ratio was 18.78% as on Sept. 30.
For the first half of FY26, the bank's net profit was INR 11.42 billion, higher than INR 10.74 billion a year ago. Total income in Apr-Sept was INR 104.13 billion as compared with INR 88.27 billion a year ago.
The bank's board re-appointed Sanjay Agarwal as the managing director and the chief executive officer for three years, effective Apr. 19, 2026. Shares of the bank Friday ended 0.8% lower at INR 792.45 on the National Stock Exchange. The bank released its financial results after market hours. End
Edited by Vandana Hingorani
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