Shares of AU Small Finance Bank gained around 2% in early trade after the bank reported a healthy set of financial results for the third quarter of FY26, led by strong profit growth and stable asset quality.
For the quarter ended December 2025, AU Small Finance Bank reported a 16% year-on-year rise in net interest income (NII) to ₹2,341 crore, compared with ₹2,023 crore in the corresponding quarter last year. The growth in NII reflects steady loan book expansion and better yields, supported by a diversified retail-focused portfolio.
Operating profit for Q3 FY26 stood at ₹1,215 crore, registering a modest 1% increase from ₹1,204 crore in Q3 FY25. While operating expenses remained elevated due to continued investments in branches, technology, and workforce expansion, core operating performance stayed resilient.
Net profit showed a strong improvement, rising 26.5% year-on-year to ₹668 crore, compared with ₹528 crore in the same quarter last year. The sharp increase in profit was driven by higher core income and controlled credit costs, which helped offset pressure on margins and operating expenses.
Asset quality trends remained stable during the quarter. Gross non-performing assets (GNPA) improved on a sequential basis to 2.3%, compared with 2.41% in the previous quarter. Net non-performing assets (NNPA) remained flat at 0.88% quarter-on-quarter.
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