AU Small Finance Bank, India's largest small finance bank, is transitioning to a universal bank and reports its Q2 FY 2026-2027 numbers with deposits and loans already growing at over 25% YoY on a provisional basis. The print will be tested on whether the bank closes the gap to its 1.8% ROA target for FY27 and whether other income improves as management promised over the next 6 to 9 months.
| Results date | October 24, 2026 |
|---|---|
| Quarter | Q2 FY 2026-2027 |
| Previous quarter NIM | 5.9% (Q1 FY27) |
| Previous quarter GNPA | 2.10% (Q1 FY27) |
| Market cap | Rs. 74,340.41 Cr |
| CMP | Rs. 989.4 |
AU Small Finance Bank Ltd is scheduled to report its Q2 FY 2026-2027 results on October 24, 2026.
The quarter's central test is the path to the 1.8% ROA target for FY27 — Q1 FY27 printed ~1.7% and management has guided that the 10 bps improvement will come from opex and credit cost, not NIMs. Provisional Q2 FY27 business updates show deposits at Rs. 1,70,460 Cr (+28.6% YoY, +8.1% QoQ) and gross loan portfolio at Rs. 1,53,770 Cr (+25.1% YoY), running well ahead of private banks' system deposit growth of 13.8% at end-June 2026. Entering the print, Q1 FY27 NIM was 5.9% (vs 5.96% in Q4 FY26), cost of funds 6.48%, GNPA 2.10% and credit cost 0.8% against the FY27 build of ~90 bps; management has flagged that cost of funds may have bottomed and that Q4 FY26's seasonal margin benefits will dissipate. Other income is the guide under genuine test — the CEO called it 'not up to the mark' in Q1 and promised improvement over the next 6 to 9 months, with Q2 the first checkpoint against a quarter in which G-sec yields hardened from mid-August. The universal bank transition remains on track, with the final license application submitted in March 2026 and ICRA expecting completion in FY2027, while concrete ECL framework details are promised by end of Q3 FY27.
ROA, credit cost and other income vs FY27 guidance: The 1.8% ROA bridge runs through opex and credit cost, with other income the first checkpoint of a 6-9 month improvement promise.
NIM and cost of funds trajectory
Universal bank license and ECL transition
Deposits, CASA and loan growth vs provisional print
Capital actions and unsecured/MFI growth resumption
Management has said the improvement from ~1.7% ROA in Q1 FY27 to the 1.8% FY27 target will come from opex and credit cost, not NIMs. The CEO also cautioned that the 1.8% in-quarter ROA delivered in Q4 FY26 'should not be seen as our permanent ROA because there are external challenges'.
Management has built FY27 credit cost at ~90 bps (internal model 0.90%), with a benchmark of 85-90 bps, and said 'our performance should be better than that'. Q1 FY27 credit cost printed at 0.8% of average assets.
The bank submitted its final universal bank license application in March 2026 after receiving RBI's in-principle approval on August 7, 2025. ICRA expects completion in FY2027 and revised its rating outlook on the bank's bonds to Positive.
Management has said the proforma impact should be neutral to positive, with 'no significant additional hit on the balance sheet'. Concrete details are expected by end of Q3 FY27, with a dedicated team and an external agency building the models.