AU Small Finance Bank Reappoints CEO Sanjay Agarwal; Q2 Profit Surges to ₹5.61 Billion Despite Higher Provisions

AU Small Finance Bank Q2 Results: Profit Growth, Stable Asset Quality

AU Small Finance Bank Ltd reported healthy financials for the September quarter (Q2 FY26), reflecting resilient operational performance and consistent loan growth. Despite a rise in provisions, profitability and interest income both improved, supported by expansion across retail and small-business segments.

Financial Highlights

The bank recorded a net profit of ₹5.61 billion, demonstrating steady growth on the back of robust lending activities and steady net interest margins. Interest earned stood at ₹45.11 billion, showcasing strong traction in the bank’s asset portfolio driven by diversified credit offerings.

On the asset quality front, the gross non-performing asset (NPA) ratio remained stable at 2.41%, underscoring prudent underwriting measures. However, provisions and contingencies rose to ₹4.81 billion, reflecting conservative provisioning amid broader macroeconomic uncertainties.

Notable Updates

Leadership stability: The board reappointed Sanjay Agarwal as Managing Director and CEO, reinforcing leadership continuity for the next term.

Lending momentum: Growth was led by expanding retail, MSME, and vehicle finance segments, contributing to overall portfolio strength.

Interest income surge: Higher yields on advances and better loan book mix supported a robust rise in interest earnings.

Credit quality discipline: The bank maintained a cautious approach to asset quality, indicated by stable GNPA levels and higher provisioning coverage.

Customer base expansion: Continued branch additions and digital initiatives drove deeper customer penetration, particularly in semi-urban and rural markets.

Operational efficiency: Enhanced digital adoption helped streamline transactions and reduce cost-to-income ratios over time.

Major Takeaways

AU Small Finance Bank’s Q2 numbers highlight its ability to combine growth with stability, even amid economic challenges. The reappointment of Sanjay Agarwal signals continuity in strategic direction, focusing on expanding lending operations, digital transformation, and maintaining a high-quality balance sheet through disciplined asset management.

Source: BSE Corporate Filings, AU Small Finance Bank Investor Presentation, Company Results Disclosure.