Synopsis
AU Small Finance Bank recorded steady growth in the fourth quarter, with deposits up 23% year-on-year to Rs 1.52 lakh crore and advances up 25%. Despite strong operational performance, the stock declined amid broader weakness in banking stocks, capital outflows from FIIs and macroeconomic pressures from rising oil prices and geopolitical tensions.
ETMarkets.comAU Bank Deposits Rise 23% and Grow 25% in Q4 Update.
Private sector lender AU Small Finance Bank reported steady growth across all major items on its balance sheet, its fourth quarter business update showed on Saturday.
The bank’s total deposits stood at Rs 1.52 lakh crore as on March 31, 2026, registering a growth of 22.8 per cent YoY and a sequential increase of 10.3 per cent from Rs 1.38 lakh crore as on December 31, 2025. CASA deposits stood at Rs 43,360 crore, up 19.6 per cent YoY. and 8.5% quarterly. However, the CASA ratio stood at 28.4%, compared to 29.2% a year ago and 28.9% in the previous quarter.
On the advances front, gross advances stood at Rs 1.36 lakh crore, reflecting a growth of 25.1% year-on-year and a sequential increase of 8.7% from Rs 1.26 lakh crore. The bank’s securitized and allocated portfolio stood at Rs 4,290 crore, compared to Rs 6,926 crore a year ago and Rs 4,689 crore in the previous quarter.
Overall, the gross loan portfolio (A+B) stood at Rs 1.40 lakh crore as on March 31, 2026, representing a growth of 21.3% year-on-year and an increase of 8% quarter-on-quarter from Rs 1.30 lakh crore.
Banking stocks have come under severe pressure over the past three months, with most lenders underperforming the benchmark Nifty 50 index amid a challenging macroeconomic backdrop marked by sustained outflows by foreign institutional investors (FIIs), escalating geopolitical tensions and a surge in energy prices. Shares of AU Small Finance Bank are down 13% year to date.
This underperformance comes amid persistent FII selling, which has had a disproportionate impact on financial stocks due to their heavy weighting in benchmark indices. At the same time, the escalating Iran-Israel conflict has triggered a surge in crude oil prices, sparking concerns about inflation and delaying expectations that global central banks will cut interest rates.
In another development, in February, the Haryana government withdrew the lender from government business after alleged fraudulent activities came to light.
The company issued a clarification Sunday evening, saying it had initiated an internal review regarding two accounts in question. The bank further said that these two accounts were “duly opened after completing all applicable KYC checks and required authorizations” and were in compliance with the bank’s internal policies and processes.
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