AU Small Finance Bank Q1 net profit rises 16 % to Rs 581 crore

AU Small finance Bank

AU Small Finance Bank on Saturday posted a 16 per cent growth in net profit to Rs 581 crore during the first quarter of this financial year.

The total income rose to Rs 5,189 crore during the June 2025 quarter from Rs 4,278 crore in the same period of FY25, AU Small Finance Bank said in a regulatory filing.
Interest earned by the bank improved to Rs 4,378 crore compared to Rs 3,769 crore in the June quarter of FY25. Net interest income rose to Rs 2,045 crore during the quarter against Rs 1,921 crore a year ago.

The bank's operating profit also increased to Rs 1,312 crore from Rs 952 crore in the year-ago period. However, the bank's asset quality witnessed deterioration, as gross non-performing assets (NPAs) rose to 2.47 per cent of gross advances at the end of the June quarter, from 1.78 per cent a year ago.

Gross loan portfolio (GLP) grew 18 per cent to Rs 1,17,624 crore compared to Rs 99,792 crore as of Q1 FY25, it said. Similarly, net NPAs, or bad loans, increased to 0.88 per cent against 0.63 per cent in the year-ago period. As a result, provisions and contingencies almost doubled to Rs 533 crore during the first quarter compared to Rs 283 crore a year ago. Provision Coverage Ratio (PCR) stood at 83 per cent at the end of June 2025.

However, the capital adequacy ratio of the bank declined to 19.42 per cent from 20.11 per cent in the same quarter of FY25.

The bank's key profitability metrics remained steady, with annualized Return on Assets (RoA) at 1.5% and Return on Equity (RoE) at 13.3%, compared to 1.6% and 13.2% respectively in Q1 FY25. Earnings Per Share (EPS) for the quarter stood at Rs 7.8, reflecting a 15% YoY growth, while Book Value Per Share (BVPS) increased by 14% YoY to Rs 239.

Operational efficiency improved as the Cost-to-Income ratio dropped to 54.0%, down from 60.8% in Q1 FY25 and 54.7% in Q4 FY25.

On the balance sheet front, total deposits surged by 31% YoY to Rs 1,27,696 crore, up from Rs 97,290 crore as of June 2024. The bank’s Gross Loan Portfolio (GLP) also continued to grow, reaching Rs 1,17,624 crore, reflecting sustained credit expansion.

Sanjay Agarwal, Founder, MD & CEO, 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 geo-political 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.