AU Small Finance Bank FY26 results: key numbers to watch

Why FY26 results matter for AU SFB investors

AU Small Finance Bank’s upcoming FY26 results will offer a detailed view of profitability, asset quality and capital position after a year marked by tight liquidity and elevated interest rates. The numbers also matter because the bank’s board decisions around dividend and renewal of fund-raising limits can directly shape shareholder returns and future growth plans. For a lender that has expanded its scale after the Fincare Small Finance Bank merger, investors typically look for consistency across growth, margins and credit costs. The latest available quarterly and full-year disclosures already show a mix of strong core income momentum and some pressure in unsecured portfolios.

Dividend and fund-raising limits: the two board signals

The dividend decision is a direct input into shareholder returns and is watched closely in banking names where payout policy can change with capital needs. For FY 2024-25, AU SFB’s board approved a dividend of Re 1 per share (10% of face value), subject to shareholder approval. Alongside dividends, any move to renew fund-raising limits is typically read as a signal that the bank wants optionality to raise capital for expansion, regulatory buffers, or balance sheet growth. The bank has previously used the bond market as well, including raising ₹770 crore through Tier-II bonds in March 2025.

AU SFB’s business backdrop and sector positioning

Established in 1996, AU Small Finance Bank has grown into a key small finance bank with a mix of retail and wholesale products. The bank expanded significantly following its merger with Fincare Small Finance Bank, effective April 1, 2024, after RBI approval on March 4, 2024. The deal was an all-stock merger first announced on October 29, 2023, where Fincare shareholders received 579 shares of AU SFB for every 2,000 shares held. The consolidation was the first such combination in the small finance bank sector and increased AU’s operational reach and customer access.

Q4 FY25: core income strength, margin expansion

In Q4 FY25, AU SFB reported Net Interest Income (NII) of ₹2,094 crore, up 57% year-on-year from ₹1,337 crore in Q4 FY24. Profit After Tax (PAT) rose 18% year-on-year to ₹504 crore versus ₹428 crore in the year-ago quarter. The bank also reported other income of ₹761 crore, up 41% year-on-year, and pre-provisioning operating profit (PPoP) of ₹1,292 crore, up 99% year-on-year. Net Interest Margin (NIM) improved to 5.8% from 5.1% in Q4 FY24, while the cost-to-income ratio improved to 55% from 65%. On a market day referenced alongside the results, the stock closed 1.22% lower at ₹613.8 on the NSE before the results were announced, compared with a 0.17% uptick in the Nifty.

FY25 full-year snapshot: profit growth with tighter cost ratios

For FY25, AU SFB reported net profit of ₹2,106 crore, up 32% year-on-year from ₹1,591 crore. NII rose 55% year-on-year to ₹8,012 crore, while other income increased 49% to ₹2,526 crore. FY25 PPoP grew 86% to ₹4,581 crore and the cost-to-income ratio declined from 64% in FY24 to 57% in FY25. The bank reported FY25 NIM of 5.94% compared with 5.45% in FY24, and ROA and ROE of 1.5% and 13.1% respectively. Shareholder’s funds were reported at ₹17,166 crore and capital adequacy ratio at 20.1% as of March 31, 2025, with Tier I at 18.1%.

Q1 FY26: growth continues, but NIM moderates

For Q1 FY26, the bank reported NII of ₹2,045 crore, up 6% year-on-year from ₹1,921 crore in Q1 FY25. Other income increased 59% year-on-year to ₹811 crore from ₹509 crore, aided by higher treasury income. Operating expenses rose 4% year-on-year to ₹1,543 crore, while PPoP increased 38% year-on-year to ₹1,312 crore. PAT increased 16% year-on-year to ₹581 crore compared with ₹503 crore. NIM declined by about 38 basis points to 5.4% compared with 5.8% in Q4 FY25, while cost-to-income improved to 54.0% from 60.8% in Q1 FY25.

Advances, deposits and portfolio mix: secured up, unsecured calibrated

AU SFB’s gross loan portfolio (GLP) stood at ₹117,624 crore in Q1 FY26, up 18% year-on-year from ₹99,792 crore in Q1 FY25. The bank said secured businesses grew 22% year-on-year, while unsecured businesses (primarily microfinance and credit cards) declined 23% year-on-year, citing cyclical slowdown in microfinance and calibration of the credit card book. On deposits, current deposits grew 34% year-on-year to ₹6,348 crore and savings deposits grew 13% year-on-year to ₹30,983 crore. The bank stated stable deposits now stand at 79% of total deposits, and cost of funds declined to 7.08% in Q1 FY26 from 7.14% in Q4 FY25.

Asset quality: GNPA and NNPA movement stays in focus

Asset quality is likely to remain a key monitorable in FY26 results given stress described in microfinance and credit cards. In Q1 FY26, GNPA stood at 2.47% and NNPA at 0.88%, compared with 2.28% and 0.74% in Q4 FY25. The bank reported floating provisions of ₹41 crore and contingency provisions of ₹17 crore towards the microfinance portfolio, and a provision coverage ratio including technical write-offs of 83%. For FY25, net credit cost was reported at 1.3% of total assets. Executives also indicated in a post-earnings call that microfinance loans may take a few more quarters to reach normalcy.

Peer context: AU’s Q4 FY25 stands out versus some SFBs

The small finance bank space has seen uneven profitability due to credit cycle pressure in certain unsecured segments. In Q4 FY25, Ujjivan SFB saw a 75% year-on-year decline in net profit, and Equitas SFB reported an 80% drop. In contrast, AU SFB reported 18% year-on-year PAT growth and 57% NII growth in the same quarter. This divergence is part of why the market closely tracks AU’s underwriting stance, provisions and portfolio mix through FY26.

Quarterly snapshot (Dec ’25 vs Sep ’25): revenue, EBITDA and profit

A separate quarterly snapshot for AU SFB showed revenue of ₹5,451 crore for Dec ’25 versus ₹5,223 crore for Sep ’25, a growth of 4.35%. EBITDA was ₹3,270 crore in Dec ’25 versus ₹3,095 crore in Sep ’25, up 5.64%. Net profit was ₹667.66 crore in Dec ’25 compared with ₹560.87 crore in Sep ’25, up 19.04%. The same data set listed the last quarter net profit at ₹667.66 crore (last updated on Mar 28, 2026).

Key data table: profitability, margins and asset quality

Market view: what to track when FY26 results are released

When the FY26 results are released, investors are likely to focus on three linked areas. First is profitability quality, including the relationship between NII growth, other income and operating expense discipline. Second is asset quality and provisioning, especially in microfinance and credit cards, where management has already highlighted a slower return to normalcy. Third is capital planning, where dividend decisions and renewal of fund-raising limits provide clues on balance sheet ambitions and regulatory buffers.

Conclusion

AU Small Finance Bank enters FY26 with a track record of strong FY25 profit growth, improving cost ratios and a large post-merger balance sheet, while also navigating a more cautious phase in unsecured lending. The official FY26 results, dividend decision and any renewal of fund-raising limits will be central updates for shareholders, with asset quality and margins likely to remain the most watched metrics.