Axis Bank's Q1 Performance: Profit Declines Slightly Despite Marginal Net Interest Income Growth Year-over-Year.
  • 598 views
  • 2 min read
  • 0 likes

Axis Bank announced its financial results for the first quarter of FY26, reporting a 4% year-on-year (YoY) decline in standalone net profit, which fell to ₹5,806 crore from ₹6,035 crore in the same quarter last year. The results, announced on Thursday, July 17, 2025, revealed a marginal increase in net interest income (NII), alongside a significant rise in provisions.

The bank's net interest income (NII), a key indicator of core lending operations, saw a marginal increase of 1%, reaching ₹13,559.75 crore compared to ₹13,448.23 crore in the corresponding quarter of the previous year. Some analysts had anticipated a slightly better NII performance, with Nuvama projecting a 2.7% YoY growth. However, YES Securities suggested that NII growth would be slower than average loan growth due to a fall in yield on advances outpacing the cost of deposits.

Despite the muted growth in NII, Axis Bank's operating profit (before provisions and contingencies) increased by 14% YoY, climbing to ₹11,515 crore from ₹10,106 crore in Q1 FY25. Total operating revenue also saw an 8% increase, rising to ₹20,818 crore. Core operating revenue, excluding trading and exchange gains, increased by 3% to ₹19,398 crore. The increase in operating profit was offset by a sharp rise in provisions and contingencies, which nearly doubled to ₹3,948 crore in Q1 FY26 from ₹2,039 crore in the same quarter last year. This substantial increase in provisions was a major factor contributing to the decline in net profit.

The bank's asset quality showed some signs of stress. Gross Non-Performing Assets (NPAs) rose to ₹17,765 crore from ₹14,490 crore in the previous quarter. The gross NPA ratio increased to 1.57% from 1.28% quarter-on-quarter (QoQ). Similarly, net NPA increased to ₹5,066 crore from ₹3,685 crore QoQ, with the net NPA ratio rising to 0.45% from 0.33%.

Several key subsidiaries of Axis Bank continued to perform steadily. The total profit from domestic subsidiaries in Q1FY26 was ₹451 crores, a 4% increase YoY, yielding a return on investment of 47%. Axis Finance saw its PAT grow by 23% YoY to ₹189 crores, with stable asset quality metrics and an ROE of 13.98%. Axis AMC's PAT grew by 12% YoY to ₹130 crores. Axis Securities' customer base grew 15% YoY, with a Q1FY26 PAT of ₹89 crores. Axis Capital recorded a PAT of ₹38 crores and executed ECM deals during the quarter.

Other key financial highlights from Axis Bank's Q1 results include: Operating revenue up 8% YOY, Operating expenses up 2% YOY and down 5% QOQ, Net Interest Margin (NIM) at 3.80%, Non-interest income up 25% YOY, Fee income up 10%, Retail fee up 9%, granular fees at 91% of total fees, Cost to assets at 2.41% declined 13 bps YOY and 5 bps QOQ, SME loans up 16% YOY and 2% QOQ, Corporate loans up 9% YOY and 6% QOQ, Mid-Corporate (MC) up 24% YOY, Overall CAR stood at 16.85% with CET-1 ratio at 14.68%.

In conclusion, Axis Bank's Q1 FY26 results reflect a mixed performance. While the bank demonstrated growth in operating profit and revenue, a significant increase in provisions led to a decline in net profit. The marginal rise in NII and concerns over asset quality, as indicated by the rise in NPAs, also contributed to the subdued results.


Written By
Madhav Verma is a driven journalist with a fresh perspective, a dedication to impactful storytelling, and a passion for sports. With a recent degree in Journalism and Mass Communication, he's particularly keen on environmental reporting and technology trends. Madhav is committed to thorough research and crafting narratives that inform and engage readers, aiming to contribute meaningful insights to the current media discourse, all while staying updated on the latest sports news.
Advertisement

Latest Post


Advertisement
Advertisement
About   •   Terms   •   Privacy
© 2025 DailyDigest360