AU Small Finance Bank Releases Q2 FY26 Earnings Call Transcript, Highlights Strong Performance & Universal Bank Transition
AU Small Finance Bank released its Q2 FY26 earnings call transcript, reporting a 6% H1 profit growth, 21% deposit growth, and 17% loan growth. NIM expanded, and credit costs declined. The bank also received in-principle approval for a universal bank license.
The announcement details the bank's latest quarterly financial performance, which is a key indicator for investors. The approval for a universal banking license represents a significant strategic milestone with potential long-term benefits for the bank's operations and market positioning. These factors collectively indicate a high impact on the company's future prospects and investor perception.
The announcement highlights strong financial performance with profit growth, significant deposit and loan book expansion, NIM improvement, and declining credit costs. The in-principle approval for a universal bank license is a major positive strategic development, expected to enhance trust and optimize funding costs. Management commentary indicates confidence in future growth and market share expansion.
* AU Small Finance Bank Limited (AUBANK) announced the submission of the transcript of its conference call for the financial results for the Quarter and Half Year ended September 30, 2025, held on October 17, 2025. * The transcript is also available on the Bank’s website. * Key Financial Highlights for Q2 FY26 & H1 FY26: * Profit after tax: ₹561 crores for Q2; ₹1,142 crores for H1 (6% Y-o-Y growth). * ROA: 1.4% for Q2; 1.4% for H1. * ROE: 12.4% for Q2; 12.9% for H1. * Net Interest Income (NII): Increased 5% sequentially. * Net Interest Margin (NIM): Expanded by 5 bps Q-o-Q to 5.5% from 5.4% in Q1, driven by a 25 bps decline in cost of funds. * Credit cost: Declined to ₹481 crores in Q2 (vs. ₹533 crores in Q1); H1 annualized credit cost was 1.28%. Expected to be within 1% guidance for the full year. * Deposit Growth: * Deposit base crossed ₹1,32,000 crores, growing 21% Y-o-Y and 3.8% Q-o-Q. * CASA deposits grew 9.7% Y-o-Y; CASA ratio stable at 29.4%. * Cost of funds reduced by 25 bps to 6.83% from 7.08% in Q1. * Peak SA rate cut by another 25 bps from October 3rd, taking total SA rate cut to 75 bps this fiscal year. * Loan Portfolio Growth: * Total loan portfolio grew 17% Y-o-Y and 4.5% Q-o-Q to ₹1.23 lakh crores. * Retail Secured Assets (wheels, mortgages, gold loan) grew 20% Y-o-Y and 5% Q-o-Q to ₹83,000 crores (67% of total). * Wheels book grew 26% Y-o-Y to ₹40,000 crores. * Mortgages grew 14% Y-o-Y to ₹40,000 crores. * Gold loans grew 19% Q-o-Q to ₹2,300 crores. * Commercial Banking grew 22% Y-o-Y and 4% Q-o-Q (21% of total). * Unsecured portfolio degrew by 23% Y-o-Y and 2% Q-o-Q (8% of total), with MFI stabilizing and Credit Card/Personal Loan showing normalizing credit costs. * Strategic Developments & Outlook: * Received in-principle approval from RBI on August 7 for transition to a universal bank with an 18-month transition time. * Q2 marks the bottoming out of the current cycle, with strong growth in core businesses, stabilizing unsecured book, uptick in margins, and declining credit costs. * Expects improved economic environment in H2, supported by festive season, GST cuts, and government capex. * Universal banking license expected to enhance trust, optimize cost of funds, and aid cross-selling. * Management emphasized focus on expanding market share in existing retail asset segments rather than changing asset mix with universal bank status. * Expressed deep condolence on the untimely demise of Mr. Vimal Jain, CFO of the bank.
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AU Small Finance Bank Limited filed this with the NSE as a statutory disclosure, categorised under concall transcript released. It is a primary document, not a recommendation, and the desk marks it high impact, which is the band that most often changes something.
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See the model portfoliosA plain-language summary of a public exchange filing by AU Small Finance Bank Limited. Read the original for the full detail.