AU Small Finance Bank Ltd.PAT +53% to ₹858 Cr, deposits +29%

AU Small Finance Bank's Q2 FY27 call, held on 24 October 2026, showed a lender growing faster than its sector while its margin slipped.

Profit after tax rose 53% to ₹858 crore, with return on assets of 1.7% and return on equity of 16.1%. Deposits grew 29% on the year against 18% for the banking system, and the CASA ratio rose to 29.5%. Loans grew 25%, led by wheels at about ₹51,000 crore and commercial banking at about ₹35,300 crore, while gold loan growth cooled to 4% on the quarter. Provisions fell 25% to ₹359 crore, gross NPAs eased to 1.99% and credit cost was 0.8%.

The net interest margin fell 9 basis points on the quarter to 5.8% on higher liquidity, and management expects rising rates and fading system liquidity to cap further funding-cost gains. A draft insurance fee rule is a headwind, which management plans to offset with forex, card and trade finance income. It kept its deposit growth target near 25% and its credit cost guidance near 90 basis points. Of 14 earlier promises, 12 were on track or ahead and two were not discussed.