AU Small Finance Bank Reports 26% Increase in Net Profit, Reaching Rs 667 Crore
AU Small Finance Bank has reported a significant increase in its net profit for the December 2025 quarter, reaching Rs 667.66 crore, a rise of 26.3% from Rs 528.45 crore during the same period last year. This growth is attributed to robust core earnings and a notable decrease in credit costs, which helped to counterbalance rising operating expenses. The bank’s net interest income also saw a healthy increase, reflecting improved financial performance.
Strong Financial Performance
In the December 2025 quarter, AU Small Finance Bank’s net interest income (NII) surged by 15.8% year-on-year, amounting to Rs 2,341.27 crore, compared to Rs 2,022.71 crore in the previous year. The bank’s interest income rose to Rs 4,727.47 crore from Rs 4,113.48 crore, while interest expenses increased to Rs 2,386.20 crore from Rs 2,090.77 crore. On a sequential basis, NII grew by 9.2% from Rs 2,144.42 crore in the September 2025 quarter, indicating improved yields on advances and stable funding costs. This solid performance in core earnings has positioned the bank favorably in a competitive market.
Leadership Changes and Strategic Realignment
During the quarter, AU Small Finance Bank announced several key changes in its board and senior management as part of a strategic realignment. Phani Shankar has been appointed as a non-executive independent director for a three-year term. Additionally, Vivek Tripathi, the chief credit officer, is set to become a whole-time director, pending regulatory and shareholder approvals. Uttam Tibrewal will continue as deputy CEO after completing his term as whole-time director in April 2026. Meanwhile, Divya Sehgal has resigned from her position as a non-executive non-independent director following the integration of Fincare Small Finance Bank. V G Kannan is also nearing the end of his second term as an independent director, which concludes in January 2026.
Revenue Growth and Operating Expenses
The bank’s other income increased by 17.0% year-on-year, reaching Rs 723.80 crore, up from Rs 618.41 crore a year earlier. This contributed to an overall total income of Rs 5,451.26 crore for the quarter, compared to Rs 4,731.89 crore in the same period last year. However, operating expenses rose significantly by 28.8% year-on-year, totaling Rs 1,849.75 crore, driven by higher employee costs and expenses related to expansion and regulatory adjustments. Despite these rising costs, the operating profit before provisions remained stable at Rs 1,215.31 crore, slightly up from Rs 1,204.91 crore in the previous year.
Asset Quality and Capital Position
AU Small Finance Bank’s asset quality remained stable, with gross non-performing assets (NPAs) recorded at Rs 2,880.54 crore, compared to Rs 2,335.51 crore a year earlier. The gross NPA ratio was relatively unchanged at 2.30%, compared to 2.31% in the corresponding quarter last year. The bank’s capital position has also strengthened, with the capital adequacy ratio improving to 19.01% from 18.01%, providing a solid foundation for future growth. Provisions, excluding tax, decreased by 34.0% year-on-year to Rs 331.14 crore, reflecting lower credit costs, while the tax expense rose to Rs 216.51 crore from Rs 174.78 crore, in line with the bank’s increased profitability.
Observer Voice is the one stop site for National, International news, Sports, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.
Follow Us on Twitter, Instagram, Facebook, & LinkedIn
