AU Small Finance Bank Q2 net profit rises 53% to ₹860 crore

AU Small Finance Bank Limited (NSE: AUBANK)

reported a Q2 standalone net profit of ₹860 crore, up about 53.3% from ₹561 crore a year ago. Revenue rose 24.38% to ₹5,611 crore from ₹4,511 crore. Gross NPA improved to 1.99% from 2.10% in the previous quarter, a fall of 11 bps. Net NPA moved the other way, rising 5 bps to 0.81% from 0.76%. Why it matters: profit grew more than twice as fast as revenue. That implies costs and credit charges grew slower than income, which is what investors want to see in a lender. Gross NPA below 2% adds comfort on loan quality. My view: the two NPA numbers point in different directions. Gross NPA falling while net NPA rises can mean the bank is holding slightly less provision against bad loans, or that fresh stress is showing in a few segments. The data I have does not say which. A 5 bps move is small, so I treat it as a watch item, not a warning. Earnings growth and better gross asset quality carry more weight for now. What I am watching: Whether net NPA moves back toward 0.75% next quarter. I am also tracking loan disbursement growth, net interest margin stability and management commentary on cost of funds and deposits. If deposit costs rise faster than loan yields, margins will come under pressure. Please note that the information shared is intended solely for informational purposes and does not make any investment recommendations.