AU Small Finance Bank Q1: PAT jumps 37% to ₹796 crore; NII rises 32%, Yogesh Jain elevated as deputy CEO

AU Small Finance Bank has reported 37% year-on-year (YoY) growth in its net profit to ₹796 crore for the first quarter ended June 30, 2026, driven by robust growth in net interest income, healthy loan and deposit expansion, and improved asset quality.

The bank's board also approved the elevation of chief operating officer Yogesh Jain as deputy CEO with effect from July 25, 2026, to strengthen its leadership structure as the lender scales up operations.

During the quarter under review, net interest income (NII) increased 32% YoY to ₹2,695 crore, while net interest margin (NIM) expanded 47 basis points to 5.9%.

Deposits, loans continue strong growth

Total deposits grew 24% YoY and 3% sequentially to ₹1.58 lakh crore, while CASA deposits increased 22% YoY, with the CASA ratio remaining healthy at 29%.

The gross loan portfolio expanded 23% YoY to ₹1.44 lakh crore, supported by around 42% growth in disbursements.

Secured lending businesses, comprising retail and commercial loans, grew 25% YoY, while unsecured businesses recorded an 11% increase.

The lender reported continued improvement in asset quality during the quarter. Gross non-performing assets (GNPA) improved to 2.10% from 2.47% a year earlier, while Net NPA declined to 0.76% from 0.88%.

Slippages declined 22% YoY to ₹798 crore from ₹1,027 crore a year ago. Annualised credit cost improved to 0.8% from 1.4% in the corresponding quarter last year.

Provisions declined 30% YoY to ₹371 crore despite an additional one-time provision of ₹23 crore towards strengthening provisioning norms for its microfinance (MFI), personal loan/business loan (PL/BL), two-wheeler, and EEFI portfolios.

The bank maintained a provision coverage ratio of 85%, including technical write-offs, and held contingency provisions of ₹37 crore and floating provisions of ₹41 crore.

Sanjay Agarwal, MD & CEO, said the Indian economy remained resilient despite geopolitical uncertainties during the quarter.

"Against this macroeconomic backdrop, the Bank delivered a strong and well-rounded performance, with healthy growth in both deposits and advances alongside improved profitability. This reflects the investments made in strengthening the franchise over the last two years through expanded distribution, enhanced technology capabilities, stronger product offerings and a high-quality talent pool," he said.

Agarwal said the quality of both growth and earnings continues to improve, supported by disciplined execution rather than one-off factors.

"We remain mindful of the evolving macro environment, but our strong capital and liquidity buffers, robust underwriting capabilities and deepening franchise strengths provide the resilience to manage uncertainties and capture opportunities responsibly," he added.

Yogesh Jain elevated as Deputy CEO

The board approved the appointment of Yogesh Jain, currently the Chief Operating Officer, as Deputy CEO with effect from July 25, 2026.

The bank said the move is aimed at strengthening its leadership structure in line with its growing scale of operations. Jain will continue to report to the MD & CEO and remain part of the bank's senior management.

During the quarter, AU Small Finance Bank added around 130 net touch points, including 16 new liability branches, primarily in urban markets. The lender now serves over 12.5 million customers through a network supported by more than 58,400 employees.