Axis Bank [NSE: AXISBANK], one of India’s top private banks, announced its Q1 FY26 financial results on 17 July 2025. The bank recorded a slight dip in profitability compared to the previous year, while net interest income (NII) rose marginally. Despite asset quality pressures, core operating performance and retail lending continued to provide stability.
The quarterly update reflects Axis Bank’s continued focus on expanding its deposit base, growing advances, and maintaining cost efficiency amidst a changing interest rate environment.
Key Financial Highlights
Axis Bank posted a net profit of ₹5,806.14 crore in Q1 FY26, marking a 3.8% year-on-year decrease from ₹6,034.64 crore reported during the same period last year. On a sequential basis, profit dropped by 18%.
Net interest income for the quarter rose 0.8% YoY to ₹13,560 crore, up from ₹13,448 crore in Q1 FY25. However, it was 2% lower than the previous quarter.
The bank’s operating profit increased 14% year-on-year to ₹11,515 crore, while core operating profit grew by 5% YoY to ₹10,095 crore. Operating expenses were contained, rising only 2% YoY.
Net interest margin (NIM), a key indicator of lending profitability, declined to 3.80%, from 3.97% in Q4 FY25 and 4.05% in Q1 FY25.
Asset Quality Overview
The bank’s asset quality saw moderate deterioration during the reporting period:
- Gross NPA ratio increased to 1.57% as of 30 June 2025, up from 1.28% in March 2025 and 1.54% in June 2024.
- The bank’s net non-performing asset ratio climbed to 0.45% in Q1 FY26, rising from 0.33% in the March quarter and 0.34% in the year-ago quarter.
In absolute terms:
- Gross NPAs stood at ₹17,765 crore, compared to ₹14,490 crore in Q4 FY25 and ₹16,211 crore in Q1 FY25.
- Net NPAs increased to ₹5,066 crore from ₹3,685 crore in the previous quarter and ₹3,553 crore a year earlier.
Provisions during the quarter rose sharply to ₹3,948 crore, up from ₹1,359 crore in Q4 FY25, reflecting higher provisioning requirements due to the asset quality movement.
Deposits and Advances Performance
Axis Bank reported a 9% YoY increase in total deposits, which stood at ₹11.61 lakh crore by the end of Q1 FY26.
Breakdown by type:
- Current account deposits increased by 9%
- Savings account deposits rose by 3%
- Term deposits grew 12% year-on-year
The CASA (Current Account Savings Account) ratio was reported at 40% for the quarter.
On a Quarterly Average Balance (QAB) basis:
- Total deposits rose 8% YoY
- Savings deposits grew 1%
- Current account deposits rose 4%
- Term deposits climbed 12%
On the lending front, total advances increased 8% YoY and 2% QoQ, reaching ₹10.59 lakh crore as of 30 June 2025.
- Retail loans stood at ₹6.23 lakh crore, comprising 59% of total advances.
- The secured retail book made up 72% of the retail portfolio, with home loans accounting for 27%.
- Small Business Banking (SBB) loans grew 15% YoY, loan against property rose 21%, personal loans increased 5%, credit card advances gained 2%, and rural lending also rose 5%.
Stock Market Reaction
Axis Bank shares closed at ₹1,161 on the NSE on 17 July 2025, registering a 0.63% decline during the trading session. The stock remains within its recent 52-week trading range, as investors continue to monitor asset quality metrics and provisioning trends.
Conclusion
Axis Bank’s Q1 FY26 results highlight a cautious but steady performance. While the drop in net profit and higher provisioning impacted the bottom line, the bank continued to grow its deposit base and maintain strong traction in retail lending. Improvements in core operations and prudent cost control reflect underlying resilience, positioning the bank to navigate market headwinds in the quarters ahead.
