AU Small Finance Bank has taken key steps to strengthen its leadership pipeline and governance structure as it prepares for a transition to a universal banking model. Alongside these organisational developments, the lender delivered a strong financial performance in the December quarter, supported by lower credit provisions and steady business growth.

The initiatives underline the bank’s focus on ensuring management continuity while reinforcing board-level oversight during a critical phase of expansion.

Leadership Succession and Management Stability

As part of its succession planning, the bank has proposed retaining certain senior executives in leadership roles to ensure long-term continuity. Deputy Chief Executive Officer Uttam Tibrewal is expected to continue in his current position after the completion of his term as whole-time director in April 2026. He will continue to oversee key business segments, including retail assets and liabilities.

Additionally, the bank has proposed the appointment of Chief Credit Officer Vivek Tripathi as an executive director. Both leadership changes are subject to regulatory approvals and are aimed at providing organisational flexibility and stability as the bank evolves.

Board Strengthening and Governance Measures

To further enhance governance standards, AU Small Finance Bank has expanded its board with the induction of new independent directors. Malini Thadani has been re-appointed as a non-executive independent director for a second three-year term. The board has also welcomed new independent members N S Venkatesh, Satyajit Dwivedi, and Phani Shankar.

These appointments come as the bank advances toward becoming a universal bank, following in-principle approval for a universal banking licence granted last year, along with an 18-month transition period.

Q3 FY26 Financial Performance

For the quarter ended December 2025, the bank reported a 26% year-on-year increase in net profit to ₹668 crore. The improvement was largely driven by a reduction in provisioning costs, which declined to ₹331 crore from ₹502 crore in the same quarter last year.

Pre-provision operating profit remained broadly flat at ₹1,215 crore. Net interest income grew 16% year-on-year to ₹2,341 crore, while other income increased 17% to ₹724 crore. Net interest margin improved by 25 basis points quarter-on-quarter to 5.7%.

Operating expenses rose 27% to ₹1,830 crore, reflecting higher business volumes, continued investment in workforce expansion, distribution capabilities, and marketing initiatives. The rise in costs weighed on operating profit growth during the quarter.

Asset Quality and Credit Growth

The bank’s gross loan book expanded 19.3% year-on-year to ₹1.30 lakh crore as of December-end. Asset quality indicators showed marginal improvement, with the gross non-performing asset (GNPA) ratio easing to 2.30% from 2.41% in the previous quarter.

Overall, the performance points to sustained loan growth alongside stable asset quality trends.

Summary

AU Small Finance Bank reported a 26% year-on-year rise in Q3 FY26 net profit to ₹668 crore, aided by lower provisions and healthy income growth. At the same time, the bank strengthened its leadership succession plans and expanded its board as it prepares for a transition to a universal bank. With steady loan growth and stable asset quality, the lender remains well-positioned for its next phase of growth.

This article is intended solely for educational and informational purposes. The securities or companies mentioned are provided as examples and should not be considered as recommendations. Nothing contained herein constitutes personal financial advice or investment recommendations. Readers are advised to conduct their own research and consult a qualified financial advisor before making any investment decisions.

Investments in securities markets are subject to market risks. Please read all related documents carefully before investing.