AU Small Finance Bank Q2’FY27 slides: 53% profit surge, AI gains

On October 24, 2026, AU Small Finance Bank announced its Q2'FY27 results, revealing a significant 53% surge in profit after tax to ₹858 crore. Despite a challenging economic climate with high interest rates and geopolitical tensions, the bank outperformed the sector's growth estimates, with deposits up by 29% and loans up by 25%.

The company's shares closed at ₹932.9, down 2.2% from the previous session. Key highlights included the bank's deposit base reaching ₹1.70 lakh crore, with CASA deposits crossing the ₹50,000 crore mark, and current account deposits growing 55% year-over-year to ₹11,693 crore. The cost of funds declined 43 basis points year-over-year to 6.41%, while gross loan portfolio expanded to ₹1.54 lakh crore.

Profitability metrics improved, with return on assets rising to 1.7% and return on equity reaching 16.1%. Net interest margin expanded to 5.8%. Other income increased by 8% to ₹770 crore, and operating expenses grew by 26% to ₹2,077 crore. The bank's asset quality improved, with gross non-performing assets declining to 1.99% and net NPAs at 0.81%.

The bank's strategic emphasis on AI and technology is evident in its digital footprint, with over 95% of transactions conducted digitally and 46 lakh registered users on its platform.