1. Opening Hook
AU Small Finance Bank just finished its 35th quarter as a bank, and management sounds like someone who’s completed the tutorial mode and is itching for the boss level. Between Ranbir Kapoor selling deposits, AI bots answering calls, and gold loans suddenly shining brighter than equity markets, this concall had everything—except humility.
Margins went up when nobody expected them to. Credit costs cooled when skeptics said “not so fast.” And MFI—yes, that MFI—is suddenly behaving. Management keeps dropping phrases like “forever bank,” “agentic AI,” and “universal banking transition,” which either means deep conviction or very expensive consultants.
But buried under the optimism are some uncomfortable truths: unsecured growth is still on probation, costs are behaving badly quarter-on-quarter, and deposit competition is still a street fight.
Read on—because the confidence is high, the numbers are interesting, and the fine print is where the real story lives.
2. At a Glance
- Deposits up 23% YoY – Management calls it franchise strength; rivals call it expensive grit.
- Loans up 19.3% YoY – Growing faster than GDP, slower than ambition.
- NIM at 5.7% (+25 bps QoQ) – Cost of funds blinked first.
- ROA at 1.6% – On track for the promised 1.8%, allegedly.
- GNPA at 2.30% – Down 11 bps; credit cycle finally exhaling.
- Credit cost at 78 bps (Q3) – MFI stopped misbehaving.
- OPEX jumped QoQ – Growth
- is not free, despite AI.
3. Management’s Key Commentary
“Q3 marks completion of 35 quarters of our banking journey.”
(Translation: We’ve survived long enough to sound confident 😏)
“Margins expanded by 25 basis points driven by cost of funds and CRR cuts.”
(RBI did some heavy lifting, but we’ll take credit.)
“Unsecured businesses have started to turn around with 1% growth led by MFI.”
(After falling down the stairs, MFI found the railing.)
“83% of the MFI book is now covered under CGFMU.”
(When in doubt, call the government.)
“We continue to invest 8–10% of OPEX in technology.”
(Cloud bills don’t pay themselves.)
“AI-based fraud systems auto-decide over 60% of alerts.”
(Humans still needed for the remaining mess.)
“We see potential to sustainably deliver 1.8% ROA.”
(Not a promise. Just… optimism.)
4. Numbers Decoded
Metric Q3 FY26 What It Really Means
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Deposit Growth 23% YoY Expensive, but scalable
Loan Growth 19.3% YoY