AU Small Finance Bank ratings reaffirmed, new infrastructure bonds assigned

On December 1, 2025, CARE Ratings Limited reaffirmed the rating of "CARE AA; Stable" for AU Small Finance Bank’s Long-Term Debt Instruments (Tier-II Bonds) and assigned the same rating to its Infrastructure Bonds. Additionally, the rating for Short-term Instruments (Certificate of Deposits) was reaffirmed at "CARE A1+". The Infrastructure Bonds were assigned a rating for an issue size of ₹1,000.00 crore.

AU Small Finance Bank's Tier-II bonds, with issue sizes ranging from ₹50.00 crore to ₹770.00 crore, were largely reaffirmed at "CARE AA; Stable." The bank's Certificate of Deposits, with issue sizes up to ₹500.00 crore, were all reaffirmed at "CARE A1+". One proposed Tier-II bond issue was withdrawn by CARE Ratings, as the instruments were unutilized and had no outstanding amount.

These ratings reflect the bank's consistent business growth, comfortable capitalisation, and healthy profitability, despite some moderation in return on assets due to increased credit costs following the integration of the Fincare Small Finance Bank portfolio. The bank's capital to risk-weighted assets ratio (CRAR) stood at 18.78% as of September 30, 2025, with net non-performing assets (NPA) at 0.88%.