Growth gains ahead for Axis Bank

Axis Bank reported a sharp drop in net profit in the second quarter of financial year 2026 (Q2FY26) on higher provisions and weak operating profit growth while revenue growth was moderate.

- DEVANGSHU DATTA

But loan growth and deposit growth improved to double-digits year-on-year (Yo-Y) and asset quality also improved with the gross nonperforming loan or NPL ratio moving down.

While net interest margin (NIM) declined marginally, it was better than consensus. Slippages also declined. Credit costs for the quarter stood at ₹3,500 crore (around 130 basis points of loans, annualised) for Q2FY26, down from 150 basis points in Q1FY26.

The reported Q2FY26 net profit was ₹5,090 crore, down 26 per cent Yo-Y.

The net interest income was up 1.4 per cent Q-o-Q (up 2 percent Yo-Y) to ₹13,740 crore. NIM contracted 7 basis points Q-o-Q to 3.73 per cent.

The provisioning stood at ₹ 3,550 crore with a onetime standard asset provisioning of ₹1,231 crore following an RBI inspection related to two discontinued crop loan variants. The loan book grew 11.7 per cent Yo-Y (up 5.4 per cent Q-o-Q). Deposits grew 10.7 per cent Yo-Y (up 3.6 per cent Q-o-Q), and credit deposit ratio (CD ratio) increased to 92.8 per cent vs 91.2 per cent in Q1FY26. The casa mix was stable at 40 percent.