Q4 2026 AU Small Finance Bank Ltd Earnings Call Transcript
Key Points
- AU Small Finance Bank Ltd (NSE:AUBANK) reported a strong quarterly performance with a 25% quarter-on-quarter and 65% year-on-year profit growth, reaching INR832 crores.
- The bank's deposit growth remained robust at 10% quarter-on-quarter and 23% year-on-year, driven by MFI and personal loans.
- Margins expanded by 24 basis points quarter-on-quarter to 5.96%, aided by a decline in the cost of funds and higher NPA resolution.
- Asset quality showed improvement with slippages declining by 17% quarter-on-quarter, leading to a GNPA ratio reduction by 27 basis points to 2.3%.
- The bank is embedding AI into its core operations, which is expected to enhance customer experience, productivity, and scalable growth without proportional cost increases.
- Geopolitical tensions in West Asia are impacting global energy prices and currency markets, elevating overall risk sentiment.
- The unsecured portfolio saw a year-on-year decline of 1%, indicating challenges in this segment.
- Despite improvements, the cost-to-assets ratio remains a focus area, with ongoing investments in manpower, distribution, and technology.
- The bank's credit costs for the full year were at 96 basis points of average assets, indicating room for further improvement.
- The competitive market in the mortgages business, particularly in affordable housing, poses challenges for disciplined pricing and underwriting.
Ladies and gentlemen, good day, and welcome to the AU Small Finance Bank Q4 FY26 earnings conference call. (Operator Instructions)
Please note that this conference is being recorded. I now hand the conference over to Mr. Prince Tiwari, Head of Investor Relations. Thank you, and over to you, sir.
Thank you, Sagar, and good evening, everyone, and warm welcome to AU Small Finance Bank's earnings call for the fourth quarter of financial year 2025-'26. We thank you all for joining us this evening. On today's call from the management, we have our Founder, MD and CEO, Mr. Sanjay Agarwal; Deputy CEO, Mr. Uttam Tibrewal; Executive Director and Chief Credit Officer, Mr. Vivek Tripathi; our COO, Mr. Yogesh Jain; CIO, Mr. Ankur Jain; and our newly appointed CFO, Mr. Gaurav Jain and the IR team.
As we made the announcement today, Mr. Gaurav Jain has been appointed as the CFO of the bank, and I take this opportunity to congratulate Gaurav on his appointment. We'll start today's call with
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