Axis Bank Q1 net profit slips 4% to ₹5,806 crore on higher provisions
Net interest income (NII) during the period grew 1% to ₹13,560 crore.
Net interest margin (NIM) for the quarter stood at 3.80%. Operating cost grew 2% YoY in Q1 FY26.
Provision and contingencies for the quarter stood at ₹3,948 crore as compared with ₹2,039 crore in the year ago period. Specific loan loss provisions stood at ₹3,900 crore. The bank holds cumulative provisions (standard + additional other than NPA) of ₹11,760 crore at the end of the quarter.
The bank said prudent application of technical parameters for recognising slippages and consequent upgrades impacted reported asset quality parameters including provisions and contingencies for the quarter.
Axis Bank said technical impact was largely restricted to cash credit and overdraft products and one-time settled accounts.
'₹821 crore of provisions and contingencies debited to the profit and loss account is attributable to technical impact. Provisions and contingencies adjusted for technical Impact is ₹3,127 crore,' it said.
The bank's balance sheet grew 9% YoY and stood at ₹16,03,308 crore as on June 30, 2025. The total deposits grew 9% YoY.
Advances grew 8% YoY to ₹ 10,59,724 crore.
As on June 30, 2025 the bank's reported gross NPA and net NPA levels were at 1.57% and 0.45% respectively, as against 1.28% and 0.33% as on March 31, 2025.
Recoveries from written off accounts for the quarter was ₹904 crore. Reported net slippages in the quarter adjusted for recoveries from written off pool was ₹5,149 crore, of which retail was ₹5,210 crore.
Gross slippages during the quarter were ₹8,200 crore, compared with ₹4,793 crore a year ago. Recoveries and upgrades from NPAs during the quarter were ₹2,147 crore. The bank in the quarter wrote off NPAs aggregating ₹2,778 crore.
As on June 30, 2025, the bank's provision coverage, as a proportion of gross NPAs stood at 71%, compared with 78% as on June 30, 2024.
The bank said fund-based outstanding of standard restructured loans implemented under the resolution framework for COVID-19 related stress (COVID 1.0 and COVID 2.0) declined during the quarter and as on June 30, 2025 stood at ₹1,148 crore, which translated to 0.10% of the gross customer assets.
The bank carries a provision of 17% on restructured loans, which is in excess of regulatory limits.
Amitabh Chaudhry, MD&CEO, Axis Bank said, 'We are optimistic as we step into FY26. With supportive regulatory conditions, the operative landscape is turning favourable. We believe large, well-capitalised banks like Axis with strong digital capabilities, innovative product suites are best suited to seize the opportunity.'
'We believe we have built a platform that allows us to grow at rates faster than the industry this year and this thesis will continue to play in the medium term,' he added.
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