AU Small Finance Bank Q4FY26: Deposits +23%, loans +25%

Overview of the provisional Q4FY26 update

AU Small Finance Bank Limited reported strong provisional business metrics for the quarter and financial year ended March 31, 2026. The update highlighted continued balance sheet growth, with deposits and advances expanding faster than the prior year. The bank also reiterated that its growth has been supported by stable asset quality indicators disclosed for the period ended December 31, 2025. The provisional update is significant because it sets expectations for the bank’s funding profile, loan book trajectory, and operating momentum ahead of detailed financial results.

Alongside the Q4FY26 provisional figures, the broader context includes the bank’s reported performance for earlier quarters of FY26, including the December 2025 quarter profit and nine-month profitability. The bank is also in an ongoing regulatory transition after receiving in-principle approval from the Reserve Bank of India (RBI) to become a universal bank, with a stated 18-month transition period. Separately, AU SFB faced a Haryana government de-empanelment for government business in February 2026, which management said did not lead to major deposit outflows.

Key Q4FY26 business growth numbers

In its provisional Q4FY26 business update, AU Small Finance Bank reported total deposits of ₹152,660 crore, up 22.8% year-on-year (YoY). Gross advances stood at ₹136,040 crore, up 25.1% YoY. The bank also disclosed quarter-on-quarter (QoQ) momentum, with deposits growing 10.3% sequentially and advances growing 8.7% sequentially.

The provisional release also stated that the gross loan portfolio reached ₹140,330 crore. This is presented as a portfolio metric alongside gross advances in the update. Together, these numbers indicate continued expansion across the bank’s core liability and asset franchise as of March 31, 2026.

CASA deposits and funding mix

CASA deposits increased 19.6% YoY to ₹43,360 crore in the provisional update. The CASA ratio was reported at 28.4%, indicating that low-cost deposits formed a little over a quarter of total deposits at the end of the quarter.

The update noted that while CASA deposits rose YoY, the CASA ratio moderated to 28.4%. For investors, this metric is watched closely because it influences funding cost and, by extension, profitability through net interest margins. The bank’s ability to grow CASA while maintaining overall deposit growth is a key operating lever, especially in competitive deposit markets.

Advances growth and the loan portfolio

On the asset side, gross advances of ₹136,040 crore reflected 25.1% YoY growth as per the provisional Q4FY26 numbers. The bank also reported that the gross loan portfolio reached ₹140,330 crore. Sequentially, the bank reported 8.7% QoQ growth in advances, suggesting continued momentum into the final quarter of FY26.

These balance sheet trends build on the growth reported earlier in FY26. For the nine months ended December 2025, the bank had reported advances of ₹129,898 crore and deposits of ₹138,415 crore. Taken together with the March 2026 provisional update, the data points to sustained scaling across both assets and liabilities through FY26.

Profitability snapshot from recent quarters

While the provisional Q4FY26 update focused on business volumes, AU Small Finance Bank’s recent profitability disclosures provide additional context. For the December 2025 quarter, the bank reported net profit of ₹667.66 crore, up 26.3% from ₹528.45 crore in the corresponding quarter last year. Net interest income (NII) for the quarter rose 15.8% YoY to ₹2,341.27 crore, compared with ₹2,022.71 crore a year earlier.

For the same December 2025 quarter, total income rose to ₹5,451.26 crore from ₹4,731.89 crore. Operating expenses increased 28.8% YoY to ₹1,849.75 crore from ₹1,436.21 crore, reflecting higher employee costs and expansion-related spending, including regulatory-linked adjustments. Provisions (other than tax) declined 34.0% YoY to ₹331.14 crore from ₹501.68 crore.

For the nine months ended December 2025, the bank reported profit after tax (PAT) of ₹1,809 crore, with return on assets (RoA) of 1.50%. It also reported pre-provisioning operating profit (PPoP) for 9M FY26 of ₹3,757 crore, up 14% YoY from ₹3,288 crore.

Asset quality and provisioning indicators

Asset quality metrics disclosed for the period ended December 31, 2025 showed gross non-performing assets (GNPA) at 2.30% and net non-performing assets (NNPA) at 0.90%. In the December 2025 quarter commentary, the bank reported gross NPAs in absolute terms at ₹2,880.54 crore, compared with ₹2,335.51 crore a year earlier, while the gross NPA ratio was largely unchanged at 2.30% versus 2.31% in the corresponding quarter last year.

The bank’s credit cost for 9M FY26 was reported at 1.1% of average assets. It also disclosed an exceptional item of ₹20 crore provisioning arising from implementation of the New Labour Codes during the quarter referenced in the provided text. These data points help explain how provisioning dynamics affected quarterly profitability.

Capital position and universal bank transition

AU Small Finance Bank reported overall capital adequacy ratio (CAR) of 19.00% and net worth of ₹19,085 crore as of December 31, 2025. The capital position matters as the bank continues to grow its advances and deposits and navigates regulatory requirements.

The bank received in-principle approval from the RBI on August 7, 2025, to become a universal bank, with an 18-month transition period. This regulatory pathway is a key structural development and is likely to remain a focus area for disclosures and compliance milestones during the transition.

Haryana de-empanelment and deposit stability

On February 18, 2026, the Haryana state government de-empaneled AU Small Finance Bank for government business. The management, as stated in the provided text, reported no major deposit outflows following this development.

For deposit franchises, such events are typically watched for any impact on institutional or government-linked balances. In this case, the bank’s statement of no major outflows sits alongside the reported QoQ deposit growth of 10.3% in the provisional Q4FY26 update.

Key reported numbers at a glance

What investors typically track from here

The provisional Q4FY26 update provides scale indicators, but investors generally wait for the final financial results for details on margins, fee income, operating expenses, and credit costs. The combination of fast balance sheet growth and a moderated CASA ratio also directs attention to deposit pricing and mix. Additionally, as the bank progresses through the universal bank transition timeline, further clarity on compliance steps and business strategy could influence how markets interpret growth and profitability trends.

On asset quality, the latest disclosed GNPA and NNPA levels (as of December 31, 2025) provide a reference point, but the March-end position will be important to monitor when audited numbers are released. The bank’s comment on no major deposit outflows after the Haryana de-empanelment is also likely to be tracked alongside subsequent deposit mix and growth disclosures.

Conclusion

AU Small Finance Bank’s provisional Q4FY26 figures showed deposits at ₹152,660 crore and gross advances at ₹136,040 crore, with strong YoY and QoQ growth rates. CASA deposits rose to ₹43,360 crore, while the CASA ratio stood at 28.4%. The next key milestones are the bank’s detailed financial disclosures for Q4FY26 and updates on the RBI-approved universal bank transition within the stated 18-month period.