Market News
3 min read | Updated on July 20, 2025, 16:09 IST
SUMMARY
AU Small Finance Bank witnessed a deterioration in its asset quality, with its Gross Non-Performing Assets (GNPA) rising to 2.47% during the quarter, compared to 1.78% in Q1FY25.
Stock list
AU Small Finance Bank's Net NPA increased to 0.88% in Q1FY26, from 0.63% in the year-ago period. | Image: Shutterstock
Shares of AU Small Finance Bank will be in focus on Monday after the bank announced its first quarter for the 2025-26 financial year (Q1FY26).
The bank’s net profit surged 15.58% year-on-year (YoY) to ₹580.86 crore in the June quarter of FY26, compared to ₹502.57 crore in the corresponding period last year.
During the quarter under review, the scheduled commercial bank’s net interest income (NII) stood at ₹2,045 crore, rising 6.45% YoY from ₹1,921 crore in the first quarter of FY25, it said in a regulatory filing dated Saturday.
AU Small Finance Bank witnessed a deterioration in its asset quality, with its Gross Non-Performing Assets (GNPA) rising to 2.47% during the quarter, compared to 1.78% in Q1FY25. Furthermore, its Net NPA also increased to 0.88% from 0.63% in the year-ago period.
As a result, provisions and contingencies almost doubled to ₹533 crore during the first quarter, as against ₹283 crore a year ago. Its provision coverage ratio (PCR) stood at 83% at the end of the June FY26 quarter.
The bank’s capital adequacy ratio declined to 19.42% from 20.11% in the same quarter of FY25.
Its total deposits stood at ₹1.28 lakh crore as on June 30, 2025, registering a 31% YoY growth from ₹97,290 crore in the year-ago period. The bank’s Current Account Savings Account (CASA) deposits increased 16% YoY to ₹37,241 crore. The CASA ratio stood at 29.2%.
Commenting on the Q1 results, Sanjay Agarwal, the founder, MD and CEO of AU Small Finance Bank, said: “India’s economy stands at an important crossroads. On one hand, the policy environment has turned supportive—with easing inflation, surplus liquidity, forthcoming CRR cuts, fiscal prudence being maintained, and expectations of a good monsoon. On the other, economic momentum remains uneven, and signs of demand recovery are still emerging across sectors. Global geopolitical uncertainty continues to pose risks, but the resilience of India’s domestic economy provides a strong counterbalance.”
“At AU Small Finance Bank, we remain cautiously optimistic. Our focus is on building a sustainable, broad-based franchise by deepening customer relationships, expanding our distribution footprint, and maintaining sharp credit discipline. We have reported another set of consistent performance in a seasonally soft quarter, showing sustainable growth in deposits, assets, and profitability. We believe that as the economic cycle strengthens, AU is well-positioned to navigate near-term uncertainties while staying committed to our long-term vision of building a Forever Bank that can truly scale with sustainability,” Agarwal added.
Shares of AU Small Finance Bank closed 0.83% lower at ₹790.30 apiece on the National Stock Exchange (NSE) on Friday, July 18.
The bank’s total market capitalisation stood at ₹58,892.60 crore, as of July 20, 2025, as per data on the NSE.
About The Author