AU Small Finance Bank Ltd.Strong Q1 with 37% PAT Growth

AU Small Finance Bank delivered robust Q1 FY27 results, with net profit surging 37% year-on-year to ₹796 crores, powered by 41% core pre-provisioning operating profit growth.

Net interest margin expanded significantly by 47 basis points to 5.9%, while return on assets improved to 1.7% from 1.5% and return on equity jumped to 15.6% from 13.3%. Asset quality strengthened considerably with slippages declining 22% year-on-year to ₹798 crores and credit cost improving 54 basis points to 0.8%. The bank outpaced industry growth with deposits expanding 24% versus sector average of 14% and loans growing 23% against 17% industry growth.

Management reiterated confidence in sustaining 2x to 2.5x India's nominal GDP growth over the next decade, supported by diversified pan-India franchise expansion and AI-driven digital transformation. Key strategic priorities include accelerating deposit franchise with 100-plus branch additions, strengthening secured lending portfolios, and maintaining disciplined risk management while capping microfinance exposure at 10% of total book.