AU Small Finance Bank on Saturday reported a 53 per cent surge in net profit at ₹858 crore for the second quarter ended September 30, 2026 on the back of improvement in interest income.

The lender had earned a net profit of ₹561 crore in the year-ago period.

Total income rose to ₹6,382 crore in the quarter under review from ₹5,224 crore in the same period a year ago, AU Small Finance Bank said in a regulatory filing.

Interest income increased to ₹5,612 crore as against ₹4,511 crore in the corresponding second quarter of the previous year.

Net interest income of the bank improved to ₹2,820 crore in the July-September quarter, from ₹2,144 crore in the September quarter of 2025, registering a growth of 32 per cent.

Net interest margin increased to 5.8 per cent from 5.5 per cent at the end of September 2025.

Asset quality of the bank also improved with gross non-performing assets (NPAs) declining to 1.99 per cent of gross advances at the end of the September quarter 2026, as against 2.41 per cent a year ago.

Net NPAs or bad loan too moderated to 0.81 per cent, as against 0.88 per cent in the year-ago period.

However, the Capital Adequacy Ratio of the bank decreased to 18.54 per cent, from 18.78 per cent at the end of September 2025.

“This quarter’s performance is a reflection of the institution we are steadily building, one that combines growth with profitability, and ambition with prudence,” AU Small Finance Bank MD & CEO Sanjay Agarwal said.

The balanced growth of the franchise, improving profitability and stable asset quality reinforce confidence that the foundations for sustained, long-term performance are firmly in place, he added.