Street ignores Axis profit dent

Fall arrested

- Ananya Roy [e-mail]

Axis Bank’s Q2 results were widely expected to bearthe brunt of the Reserve Bank of India’s (RBI) monetary policy casing and change in stance, given that 72% ofitsadvancesare linked to floating rates.

InJune, RBI cutkey lending rates by 50 basis points (bps) and shifted toancutral stance from accommodative, pushing yields higher. This was seen as a double whammy for banks: net interest margins (NIMs) would bear the full impact of the rate cut in Q2, while trading gains would suffer from rising yields.

For Axis Bank, analysts had pencilled ina sequential NIM compression of 25-30 bps, even as higher “technical” expenses following its FY25 annual inspection continued toweigh on itsreported asset quality and profits.

But barring some one-offssuch as making standard provisions on two discontinued crop loan variants, the lender fared better on many parameters against sombre expectations.