AU Small Finance Bank Limited — PPTs, 17-10-2025: Investor Presentation

AU Small Finance Bank delivered resilient Q2FY26 results despite mixed economic sentiment. Deposits grew 21% YoY to ₹132,509 Cr, with CASA stable at 29.4% and cost of funds dropping 25 bps to 6.83%. Total loan portfolio expanded 17% YoY to ₹122,877 Cr, driven by 22% growth in secured loans, while unsecured loans saw de-growth. Net profit was ₹561 Cr, with Q2 RoA at 1.4% and RoE at 12.4%, aided by improving margins (up 5 bps to 5.5%) and a 12% sequential drop in credit slippages.

Strategically, the bank is transitioning to a Universal Bank, enhancing its brand and aiming for wider deposit access and lower costs. Key growth areas include doubling distribution for Wheels, scaling Gold Loans, and 20% growth in Mortgages through geographic expansion. Digital initiatives and cross-selling are also strong focus areas.

Recent highlights include receiving in-principle approval for universal bank status in August and a 25 bps reduction in SA rates in October. The bank also added 121 touchpoints in Q2.

Key metrics: Deposits ₹132,509 Cr (+21% YoY); Gross Loan Portfolio ₹122,877 Cr (+17% YoY); NII ₹2,144 Cr (+9% YoY); Net Profit ₹561 Cr (-2% YoY); EPS ₹7.5. GNPA stood at 2.41% (vs 1.98% YoY) and NNPA at 0.88% (vs 0.75% YoY).

Management expects improved earnings in H2 from better margins and lower credit costs. Unsecured portfolios are set to resume growth from Q3, with credit card normalization anticipated by FY26 end. The bank plans continued expansion in retail secured assets and sustained tech investments.