Axis Bank, India’s fourth-largest private sector lender, reported a subdued financial performance for the September quarter, with net profit weakening to ₹5,090 crore, a 26% decline from ₹6,918 crore in the same period last year, also coming below analyst consensus estimates. Sequentially too, net profit declined 12.3% from ₹5,806 crore reported in the June quarter.
The bank’s profit during the quarter was impacted by an additional one-time standard asset provision of ₹1,231 crore for two discontinued crop loan variants, following an RBI advisory after its FY25 annual inspection.
According to the bank’s regulatory filing, “This standard asset provision will be written back to the P&L when all outstanding loans in the two discontinued product variants are recovered or closed in the normal course, or by March 31, 2028 (subject to any residual outstanding loan accounts on that date being closed), whichever is earlier.”
NII beats estimates
The bank’s net interest income (NII), the difference between interest earned from lending activities and interest paid to depositors, stood at ₹13,745 crore in Q2FY26, marking a modest 2% year-on-year rise.
This was higher than analysts’ expectation of a 3% YoY decline, while the bank’s net interest margin (NIM) also exceeded estimates at 3.5%.
Asset quality remains stable
On the asset quality front, the bank’s performance remained stable on a quarter-on-quarter basis but weakened compared to the same period last year.
As of September 30, 2025, the bank reported Gross NPAs and Net NPAs of 1.46% and 0.44%, respectively, compared with 1.57% and 0.45% as of June 30, 2025. In the same period last year, Gross NPAs stood at l.44% and Net NPA was at 0.34%.
The bank’s provision coverage ratio (PCR) stood at 70% as of September 30, 2025, down from 71% at the end of June 2025 and 77% a year earlier.
Gross slippages during the quarter came in at ₹5,696 crore, lower than ₹8,200 crore in Q1FY26 but higher than ₹4,443 crore in Q2FY25.
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