What happened
AU Small Finance Bank reported a 53% rise in net profit to ₹858 crore for the second quarter ended 30 September 2026, according to a regulatory filing reported by PTI. It had earned ₹561 crore in the same quarter a year earlier.
Total income rose to ₹6,382 crore from ₹5,224 crore. Interest income, the money earned on loans and investments, increased to ₹5,612 crore from ₹4,511 crore.
Net interest income (NII), which is interest earned minus interest paid out to depositors and lenders, grew 32% to ₹2,820 crore from ₹2,144 crore. Net interest margin (NIM), a measure of how much the bank earns on its assets after funding costs, rose to 5.8% from 5.5% at the end of September 2025.
What it means for you
Asset quality improved. Gross non-performing assets (NPAs), loans where borrowers have stopped paying, declined to 1.99% of gross advances from 2.41% a year ago. Net NPAs, which are gross NPAs after setting aside provisions, eased to 0.81% from 0.88%.
The Economic Times reported that provisions, the money set aside for possible loan losses, were 25% lower at ₹359 crore against ₹481 crore. It also reported that annualised credit cost improved to 0.8% from 1.2%.
One measure moved the other way. The Capital Adequacy Ratio, which shows the bank’s capital as a share of its risk-weighted assets, decreased to 18.54% from 18.78%.
For depositors and borrowers, these are results figures and do not by themselves change deposit or loan terms. To compare the numbers with other lenders, see our guide on how to read bank results, or the glossary entry on non-performing assets.
Managing Director and CEO Sanjay Agarwal said the quarter’s performance reflected an institution that “combines growth with profitability, and ambition with prudence.”
Background
Small finance banks are licensed banks that focus on lending to segments such as small businesses and individuals. The quarter covers July to September, the second quarter of the financial year 2026-27 (Q2 FY27).
