Axis Bank's Q2 PAT falls 26% as loan reclassification hits

One-time standard asset provisions were ₹1,231 crore, taking total provisions to ₹1,568 crore

- Anshika Kayastha

The private lender's net interest income rose 2% to ₹13,745 crore, while NIM eased to 3.82%; asset quality improved with gross NPA at 1.46% and net NPA at 0.44%.MINT

Axis Bank’s provisions on standard assets surged during Q2 FY26 due to a onetime impact of reclassification of certain priority sector loans (PSL) as standard assets, based on an advisory by the Reserve Bank of India (RBI).

However, lower loan loss provisions helped maintain overall credit costs for the quarter.

Onetime standard asset provisions due to the declassification were ₹1,231 crore, bringing the total standard asset provisions for the quarter to ₹1,568 crore—up from ₹154 crore in the previous quarter and ₹140 crore in the corresponding quarter of last year.

However, a sequential fall in loan loss provision resulted in overall provisions and contingencies being contained at ₹3,547 crore, as against 3,948 crore in the first quarter of the financial year.