AU Small Finance Bank Ltd — Q4 FY26
AU Small Finance Bank delivered a strong Q4 FY26 with PAT of ₹832 crore (+65% YoY) and ROA of 1.8%, driven by margin expansion (+24bps QoQ to 5.96%), lower credit costs (0.6%),...
bullish
high
Financial stats pending filing verification
Claim Ledger
Did management answer the analysts?
Every material analyst question, graded on whether management actually answered it — with the verbatim exchange and quantitative claims checked against filed numbers.
38%Questions answered4Evaded / deflected12Questions audited
Evasive
Medium priority
Details on contingency provision of 21 cr in Q4
Asked by Res, ICICI
Management did not provide any specific details on the accounts or exposure, only gave a generic description.
no specific details givenvague descriptionrefused to share segment or exposure
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Question
one on this contingency provision creation of 21 cr day in Q4. Uh so you have mentioned that we have built this towards some specific accounts. Uh can you share some more details around this account like you know what segment BFC registrate commercial banking or maybe what is the aggregate exposure at bank level
Management (not named)
Yeah, this is these are normal uh you know these are not some high value specific cases. These are normal business banking working capital cases. We assess the risk you know assuming that uh the risk assessment whether what amount is covered through our security and other thing uh through recommendation has been provided. So there's nothing specific to it, right?
Partial answer
Medium priority
Reason for hiking deposit rates and challenges
Asked by Res, ICICI
Management explained the overall liability strategy but did not directly address whether they face challenges in raising deposits.
no direct answer on challengesreframed to general strategy
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Question
my second question is on you know behind hiking interest rate uh in account and KD of the industry. So are we uh experiencing some challenges in raising in deposit or it is that we anticipate growth going ahead and to maintain ratio maybe we are hiking this uh rates to remain competitive.
Sanjay (Management)
Yeah. Hi Sanjay. So you know in terms of liability you know u we are not focusing on one one data point or you know one way of building it up right it is it is a combination of uh three four variables like you know one is how much you want to raise the cost of money you know how you want to play your kasa how you want to play our retail versus wholesale you know the overall CD ratio...
Partial answer
High priority
Focus on sustaining 1.8% ROA and levers
Asked by Kunal Sha, City Group
Management gave directional levers but did not commit to sustaining or improving ROA, citing seasonality.
no specific target givenmentioned seasonality but no clear guidance
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Question
we are almost at 1.8% now on exit level. So what would be the focus? Maybe would we still uh try to drive it up further or sustenance of that will be critical and what would be the levers available to drive it?
Management (not named)
so so canal obviously you know uh we know that Q4 is always seasonally strong right so that 1.8% 8% also uh you know reflect that strong seasonality u you know our goal would be to maintain this ROA or achieve this ROA on a fullear basis for next year...
Evasive
Medium priority
Quantify refund and recoveries in margin improvement
Asked by Kunal Sha, City Group
Management refused to quantify the refund and recoveries, calling them immaterial without specifics.
no quantification givendismissed as immaterial
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Question
there is element of it refund as well as well as some recoveries which is indicated in that paragraph. So how much if you can quantify that because there would be some pressure on ease as well as
Management (not named)
so I think on this side right so there was some it refund I would not say that was material to the overall movement it helped by a tiny bit but nothing specific to call out there
Evasive
High priority
How tech investments translate to business volumes and cost ratios
Asked by Mitaral, Modila Los
Management gave a long answer on tech benefits but did not provide any specific cost ratio targets or volume impact.
no specific targets givenvague on cost ratio impactdeferred to future
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Question
How do you see this translate into our business volumes and what kind of cost ratios um will you now target over the next 20 years as the bank transitions to the bank?
Sanjay (Management)
Nothing. So, so let me answer first you know. So I think why we have given you the more elaborate uh you know uh uh I think description from in our uh uh presentation and of course by our CFO Goro because we are investing lot in our tech you know...
Partial answer
High priority
Positioning on cost as a universal bank
Asked by Mitaral, Modila Los
Management gave a directional target of 3.5% cost-to-assets in 3-5 years but no concrete plan.
vague target of 3.5% cost-to-assetsno clear timeline
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Question
as an SSB the range on crosses is generally like very tight... but as a universal bank the range is very vast... where like which generally has been different class on any parameters as an SB How will you want to position yourself on on cost is now uh as you undertake this transformation?
Sanjay (Management)
I think the first benchmark should be that can I do around 3.5 you know and and that in three to four three to five years right but so I think you know it's so difficult to reduce your cost you know somehow but I think the tech is is able to give us that hope...
Answered
High priority
Should we benchmark credit cost at Q4 level?
Asked by Mitaral, Modila Los
Management gave a specific guidance of 90 bps credit cost for next year.
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Question
should we benchmark our estimates around uh credit cost basis this quarter number because if I look back we used to like have much lower credit cost versus what we have seen in this year and now we are approaching closer to that number in 4Q now
Sanjay (Management)
I would advise anybody that you should actually build a this quarter credit cost as an overall cost for next year you know uh and uh if you ask me uh you should build it around 90 pips or maybe in that range
Declined
High priority
Impact of new ECL norms on credit cost guidance
Asked by Jiant Karote, Access Capital
Management explicitly declined to provide any guidance on ECL impact.
refused to commenttoo early to say
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Question
we also have RBI norms coming through this week. So any impact on steady state credit cost for us given the entire book experience uh in recent years since we are growing that book again. So in regards to the 90 bits guidance uh how should that look with the new ECL guidelines
Sanjay and Vivek (Management)
guideline has just came in right and we haven't it's exactly the same it's exactly the same old draft and I'm so sorry to to give any any guidance around it you know you have to take us give us some time
Partial answer
Medium priority
Geographical liability expansion strategy
Asked by Jiant Karote, Access Capital
Management gave a general answer about liability growth but did not address geographic strategy specifically.
no specific geographic strategy givengeneral answer
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Question
next two two years as we transition to university bank. I do understand on the asset side you have some focus areas in the south. uh if you can help us understand what would be your strategy on liability geographically.
Sanjay (Management)
No. So I think uh if you ask me uh the the most important strategy which we work on daily basis u or maybe in exhibition or any meeting or any reviews around library franchise and uh and I think you you would have seen that you know at this level also without having a right to win in those markets you know we are able to grow our liability franchise this year too by 23%.
Partial answer
Medium priority
Residual asset quality metrics like PCR and contingency provisions
Asked by Pesh Kum, Dam Capital Advisers
Management did not provide specific forward-looking metrics on PCR or contingency provisions.
no specific PCR or ACL targetsreferred to Q4 numbers but no forward guidance
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Question
how are we looking to send in the residual uh asset quality metrics like PCR contingency provisions and ACL as we go along
Vivek and Sanjay (Management)
I think uh you know uh if you look at our Q4 numbers it will tell you the exact story we we've always been very very strong on retail assets commercializ you know assets have been rainbound large part of that was coming from our unsecured piece which was credit card and MFI. Now both businesses are settling down right
Partial answer
High priority
How to think about margins going into next year
Asked by Pam Subramanan, Invest
Management reiterated that cost of funds may have bottomed but did not give a margin outlook.
no specific margin guidancerepeated earlier points
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Question
I just wanted to understand again the how we are how we should think about margins going into next year. Um, so I heard you call out that you know there is a day on benefit this quarter and reversals as well. uh benefit of lower reversals should stay right uh because slippages are say moderating here on there. So basically how to think about that going ahead.
Management (not named)
Um so I think on this uh specific thing margins right so I'll repeat what I uh said earlier right on cost of funds I think uh we've said that you know this uh quarter cost of funds may have bottomed out with the rate increases we have taken right
Partial answer
Medium priority
Long-term target for cost of funds and retail deposits amount
Asked by Ashes Sonj, Kotak Securities
Management gave a long-term target for cost of funds but did not provide the requested retail deposit amount.
no specific retail deposit amount givenlong-term target vague
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Question
Do you have an internal target of where uh this cost of funds should be let's say relative to the banks with the lowest cost of funds uh after you get the universal bank license that is one along with that if you can also share the amount of retail deposits on the balance sheet on March 26.
Sanjay and Management (not named)
So I think the long-term target or the long-term I would say uh the way we are pushing internally that our rate should the our cost of money should be around the repo rate prevalent at that time. So if you ask me uh at this time the repo rates are 5.25 and my cost remain around 6.75