1. Opening Hook
Just when markets were busy debating rate cuts, elections, and which bank will crack next, AU Small Finance Bank quietly dropped a quarter saying, “Relax, we’ve got this.” While peers complained about margins and unsecured stress, AU walked in with higher profits, better NIMs, and improving asset quality — no drama, mostly math.
Management sounded confident, almost too comfortable, talking about universal banking like it’s a done deal and AI like it’s already on payroll. Deposits are growing faster than loans, credit costs are behaving, and even the scary unsecured book has stopped throwing tantrums.
But before you clap too hard, remember: opex is rising, competition is brutal, and execution will decide if this story compounds or plateaus.
Stick around — the real spice is in what management didn’t say, and what numbers quietly whispered. 😏
2. At a Glance
- PAT up 26% YoY – Profits showed up early; even the labour code couldn’t fully spoil the party.
- NIM at 5.7% (+25 bps QoQ) – Cost of funds blinked first, AU smiled politely.
- Loan book up 19.3% YoY – Growing faster than system credit, without losing sleep (yet).
- Deposits up 23.3% YoY – Money followed trust, not just interest rates.
- GNPA at 2.30% – Asset quality improving, unsecured finally behaving like an adult.
3. Management’s Key Commentary
“Q3 PAT grew 26% YoY to ₹668 crore, driven by NII expansion and lower
credit costs.”
(Translation: Margins helped, defaults calmed down, and luck didn’t betray us 😏)
“NIM expanded by 25 bps QoQ to 5.7%.”
(Translation: Deposit repricing worked; borrowers didn’t revolt… yet)
“Unsecured businesses have bottomed out and returned to sequential growth.”
(Translation: The scary phase is over, please stop asking about MFI now 😌)
“Credit costs declined sharply due to normalization in unsecured and recovery in secured assets.”
(Translation: What scared us last year is now statistically manageable)
“Universal banking transition is a once-in-a-lifetime opportunity.”
(Translation: Re-rating dreams are alive, please value us accordingly 🚀)
“Enterprise-wide Agentic AI roadmap is in place.”
(Translation: We don’t want to sound old-school while opening 100 branches)
4. Numbers Decoded
| Metric | Q3FY26 | QoQ / YoY Take |
|---|---|---|
| Net Interest Income | ₹2,341 Cr | +9% QoQ – spreads did the heavy lifting |
| NIM | 5.7% | CoF down, yield mix manageable |
| PAT | ₹668 Cr | +26% YoY, +19% QoQ |
| Credit Cost | 0.19% | Calm quarter, enjoy while it lasts |
| GNPA / NNPA | 2.30% / 0.88% | Slow, steady improvement |
| CASA Ratio | ~29% | Stable, not flashy |
Decoded: This is a
