Archive · 30 Jul 2026
Small Finance Banks Post Strong Q1 Earnings, Asset Quality Improves
Small finance banks in India made good money in the first quarter of the year.
They grew their loans by more than 20% and made more money from interest.
Their bad‑loan rates went down, so they had fewer problems with customers not paying back.
Some banks are also working to become full banks, which could help them grow even more.
Overall, the banks are doing better than before.
Six listed small finance banks reported robust Q1 earnings with net profit growth ranging from 37% to over 300%.
Loan growth exceeded 20% across all lenders, led by Suryoday SFB (32.6%) and Ujjivan SFB (29.2%).
Gross and net NPA ratios fell, with AU Small Finance Bank recording the lowest gross NPA at 2.10%.
Net interest income remained strong, though some banks experienced NIM compression.
Several banks highlighted progress toward universal banking licences, with Ujjivan awaiting RBI approval.
- Who
- Six listed small finance banks in India
- What
- Reported Q1 earnings, improved asset quality, and loan growth
- When
- June quarter of FY26
- Where
- India
- Why
- Strong loan growth, lower credit costs, and easing microfinance stress
- AU Small Finance Bank net profit
- Rs 796 crore
- Ujjivan Small Finance Bank net profit
- Rs 317 crore
- Loan growth
- above 20%
- Gross NPA ratio (AU SFB)
- 2.10%
- Universal banking licence status (Ujjivan)
- pending RBI approval