Did Axis Bank Experience a 4% YoY Drop in Net Profit for Q1?
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Synopsis
Axis Bank's latest financial results reveal a 4% YoY decline in net profit for Q1 FY26, despite a slight rise in net interest income. The bank's operating profit improved significantly, showcasing resilience in the face of challenges. However, rising non-performing assets raise concerns about asset quality. Discover the highlights of their report!
Key Takeaways
- Net profit decreased by 4% YoY to Rs 5,806.14 crore.
- Net interest income rose by 0.83% YoY.
- Operating profit increased by 14% YoY.
- Net non-performing assets increased by 28% YoY.
- Total advances grew by 8% YoY.
New Delhi, July 17 (NationPress) Axis Bank reported a standalone net profit of Rs 5,806.14 crore for the quarter ending June 30, 2025 (Q1 FY26), reflecting a nearly 4% year-over-year (YoY) decrease from Rs 6,034.64 crore in the same quarter of the previous fiscal year, as disclosed in an exchange filing on Thursday.
On a sequential basis, net profit saw a significant decline of over 18% from Rs 7,117.50 crore in the January–March quarter (Q4 FY25).
The bank did, however, report a modest increase in net interest income (NII), which rose 0.83% YoY to Rs 13,559.75 crore compared to Rs 13,448.23 crore from the previous year.
Thanks to robust growth in non-interest income and effective cost management, the bank's operating profit saw a strong 14% increase YoY, reaching Rs 11,515 crore.
Additionally, non-interest income surged 25% YoY, driven by impressive growth in both fee income and treasury operations, as reported by the bank.
However, Axis Bank's net non-performing assets (NPA) climbed by 28% YoY, reaching Rs 5,065 crore, up from Rs 3,552.98 crore a year prior.
With net NPA at 0.45% and gross NPA at 1.57%, there was a slight upward trend, although the bank's capital adequacy ratio remained strong at 16.85%, indicating a solid capital foundation.
Total advances grew 8% YoY to Rs 10.59 lakh crore from Rs 9.80 lakh crore, with deposits also increasing by 9% during the same period.
The provision and contingencies amount for Q1 FY26 exceeded Rs 3,948 crore, with specific loan loss provisions standing at Rs 3,900 crore.
As of the end of Q1, the bank reported total provisions (standard + additional, excluding non-NPA) of Rs 11,760 crore, according to its filing.
Retail loans experienced a growth of 6% YoY, amounting to Rs 6,22,960 crore, which constituted 59% of the bank's net advances. The proportion of secured retail loans was 72%, with home loans making up 27% of the retail portfolio.
Point of View
It’s essential to recognize the challenges Axis Bank is facing while also acknowledging its strengths. The 4% decline in net profit may raise eyebrows, yet the slight increase in NII and growth in operating profits indicate resilience. The bank's management must address the rising NPAs to maintain confidence among investors and customers. We stand with our readers, providing the necessary insights into the evolving financial landscape.
NationPress
17/07/2025
Frequently Asked Questions
What factors contributed to Axis Bank's decline in net profit?
The decline in net profit was primarily influenced by a significant drop in quarterly earnings compared to the previous fiscal year and rising non-performing assets (NPAs).
How did Axis Bank perform in terms of net interest income?
Axis Bank reported a slight increase in net interest income (NII), rising by 0.83% year-over-year.
What is the current status of Axis Bank's non-performing assets?
The bank's net non-performing assets increased by 28% year-over-year, reaching Rs 5,065 crore.
How did the bank's operating profit fare?
Despite the decline in net profit, Axis Bank's operating profit increased by 14% year-over-year.
What is the outlook for Axis Bank's future financial performance?
While the bank faces challenges with rising NPAs, its strong capital adequacy ratio and growth in advances indicate a resilient outlook.
