AU Small Finance Bank: Q3 FY26 Business Update

Executive Summary AU Small Finance Bank has delivered a robust operational performance for the quarter ended December 31, 2025 (Q3 FY26), characterized by strong double-digit growth in both deposits and advances. The bank continues to strengthen its balance sheet fundamentals as it progresses on its strategic transition toward becoming a universal bank. Key Operational Highlights (Provisional Numbers) Robust Deposit Growth: Total deposits surged by 23.3% YoY to ₹1.38 lakh crore (vs. ₹1.12 lakh crore in Q3 FY25), reflecting strong customer trust and franchise expansion. Credit Demand: Gross advances witnessed a healthy uptick of 24% YoY, reaching ₹1.25 lakh crore, up from ₹1.01 lakh crore in the corresponding period last year. Loan Book Trajectory: The total gross loan book (inclusive of securitized and assigned portfolios) grew by 19.3% YoY to ₹1.30 lakh crore. Notably, the securitized/assigned portfolio saw a planned moderation to ₹4,690 crore. CASA Trends: CASA deposits grew 16.1% YoY to ₹39,950 crore. The CASA ratio stood at 28.9%, witnessing a slight moderation from 30.6% a year ago, consistent with broader industry trends regarding deposit mix. Strategic & Financial Context Universal Banking Transition: In August 2025, the bank received significant in-principle approval from the RBI to transition into a universal bank. This milestone positions AU SFB to diversify its portfolio and enhance its liability franchise in coming quarters. Preceding Performance (Q2 FY26): The bank demonstrated resilience in Q2, with Net Profit beating street estimates at ₹561 crore, despite higher provisioning. The sustained growth in Q3 top-line metrics suggests continued business momentum following the Q2 consolidation. Investor Note These figures are provisional and subject to audit. The sustained growth in core business metrics, coupled with the pending transition to a Universal Bank license, underscores a positive long-term structural outlook for the lender.