AU Small Finance Bank Reports 53% Increase in Q2 Net Profit to ₹858 Crore

AU Small Finance Bank announced its financial results for the second quarter ended September 30, 2026, registering a net profit of ₹858 crore. The growth was supported by higher interest income and improved asset quality during the quarter.

NEW DELHI — AU Small Finance Bank reported a 53 per cent surge in net profit, reaching ₹858 crore for the second quarter ended September 30, 2026. The lender had posted a net profit of ₹561 crore in the corresponding period of the previous year.

According to a regulatory filing by the bank, total income for the July-September quarter rose to ₹6,382 crore, compared to ₹5,224 crore in the same period a year ago. Interest income increased to ₹5,612 crore, up from ₹4,511 crore in the year-ago quarter.

The bank's net interest income grew by 32 per cent to reach ₹2,820 crore during the quarter under review, compared to ₹2,144 crore in the September quarter of 2025. Additionally, the net interest margin improved to 5.8 per cent, up from 5.5 per cent recorded at the end of September 2025.

The financial results also indicated an improvement in the bank's asset quality. Gross non-performing assets (NPAs) declined to 1.99 per cent, compared to 2.41 per cent reported a year ago. Net NPAs also moderated slightly to 0.81 per cent, down from 0.88 per cent in the corresponding period of the previous fiscal.

However, the Capital Adequacy Ratio of the bank saw a marginal decline, dropping to 18.54 per cent from 18.78 per cent at the end of September 2025.

Commenting on the performance, AU Small Finance Bank MD and CEO Sanjay Agarwal said that the quarter's results reflect the institution's ongoing focus on combining growth with profitability, along with ambition and prudence. He added that the balanced growth of the franchise, improving profitability, and stable asset quality reinforce confidence in the foundation for sustained, long-term performance.

"AU Small Finance Bank's latest quarterly performance demonstrates how financial institutions can scale operations while simultaneously improving asset quality. The 32 per cent growth in net interest income alongside a reduction in gross NPAs highlights effective risk management and steady credit demand. For businesses and entrepreneurs, a stable and profitable banking sector is vital as it ensures consistent credit availability to support economic expansion and long-term enterprise growth." — Dr. Shishir Gupta, Founder & CEO, StartupLanes