The Board of Directors of AU Small Finance Bank Limited at its meeting held today, approved the financial results for the quarter and half year ended September 30, 2025.
Executive Summary
The banking sector continues to navigate a complex macroeconomic environment marked
by global headwinds from trade and tariff realignments. Domestically, the policy environment is becoming more constructive and accommodative with recent announcements on capital market lending reforms, proposed risk weight (RWA) reductions on MSME and housing and draft ECL implementation plan in a staggered manner. These announcements supplement the earlier announced cuts in policy Repo rates and CRR by RBI and Income tax and GST rate cuts by the Government.
On the operating environment, the transmission of earlier announced repo rate cuts is
leading to compression in lending yields. Additionally, Q2 also saw postponement of certain
consumer spendings post the announcement of GST rate cuts in mid-august.
Commenting on the performance, Mr. Sanjay Agarwal, MD & CEO, AU Small Finance Bank said, “Despite global uncertainties arising from trade, tariffs, and geopolitics, India’s economy continues to display resilience. The RBI’s accommodative policies—through liquidity support, CRR cuts, and a calibrated LCR framework—have sustained the momentum of our consumption-led growth. Proposed regulatory changes, such as risk- based DICGC premiums, Expected Credit Loss (ECL) norms, and lower RWA for MSME and housing sectors, along with government measures on tax rationalization, GST reduction, various credit guarantee schemes, and infrastructure led capex, are strengthening the foundations of a more competitive and future-ready economy.
At AU, we are well positioned to leverage these opportunities with our strong fundamentals,
disciplined execution, and prudent risk management. The RBI’s in-principle approval for our
transition to a universal bank reaffirms our purpose and governance standards. We remain
deeply grateful to the Government of India and the RBI for fostering an enabling environment, and sincerely thank our customers, investors, Board members, employees and all stakeholders for their continued trust and support in our journey.”