1. Opening Hook
After Bollywood brand ambassadors and an RBI-approved universal banking dream, AU Small Finance Bank decided Q3 was the right time to quietly drop a strong quarter. While markets were busy debating rate cuts and liquidity tantrums, AU went ahead and delivered growth, margin expansion, and—brace yourself—lower credit costs.
PAT grew 26% YoY, deposits grew faster than the system, and the unsecured book finally stopped being that troublesome cousin at family weddings. Management sounded confident, slightly smug, and very ready for universal bank life.
But before you start celebrating with green deposits and agentic AI buzzwords, remember—opex is rising, yields are softening, and execution will be everything from here.
Stick around. The fun translations come later, and yes, the “AI-first” slide gets decoded too 😏
2. At a Glance
- PAT up 26% YoY: Profits showed up on time, unlike last year’s unsecured stress.
- NIM at 5.7% (+25 bps QoQ): Cost of funds blinked first, yields pretended nothing happened.
- Loan growth 19.3% YoY: Faster than system credit, slower than management optimism.
- Deposits up 23.3% YoY: CASA stable, bulk TD doing most of the heavy lifting.
- GNPA at 2.30%: Unsecured mess is cleaning itself—finally.
- Credit cost at 0.78%: From panic to peace in two quarters.
3. Management’s Key Commentary
“Q3 delivered
strong performance across parameters.”
(Translation: Please ignore the last two quarters and look at this slide only.) 😏
“Unsecured credit cycle is normalising.”
(Translation: The worst is behind us, don’t ask about FY25.)
“Deposit franchise is strengthening with improving cost of funds.”
(Translation: Bulk deposits are expensive but necessary—CASA will come, trust us.)
“Enterprise-wide Agentic AI roadmap is in place.”
(Translation: We hired consultants, built decks, and pilots will start soon.) 🤖
“Universal bank transition is a once-in-a-lifetime opportunity.”
(Translation: Please value us like a large private bank already.)
“Credit cards have reached near-normalised levels.”
(Translation: Defaults stopped rising—growth resumes cautiously.)
4. Numbers Decoded
| Metric | Q3 FY26 | QoQ / YoY Decode |
|---|---|---|
| PAT | ₹668 Cr | Growth is real, not treasury-driven |
| NIM | 5.7% | CoF down 22 bps saved the day |
| GNPA | 2.30% | Unsecured cooling, secured behaving |
| Credit Cost | 0.19% | From fear to faith |
| CASA | ~29% | Stable, not spectacular |
| RoE | 14.3% | Respectable, not euphoric |
One-liner: This quarter worked because costs
