Mumbai, October 17, 2026: Axis Bank reported a 37.6% year-on-year increase in standalone net profit to ₹7,003.3 crore for the quarter ended September 30, 2026. Despite the strong growth, the private-sector lender narrowly missed analyst expectations as higher operating expenses and weaker other income offset robust loan growth and lower provisions.
Profit Rises Sharply Year on Year
Axis Bank posted a standalone net profit of ₹7,003.3 crore, compared with ₹5,090 crore in the corresponding quarter last year.
Analysts had estimated a profit of around ₹7,124 crore, according to LSEG data. The bank’s results therefore came in slightly below market expectations.
Net Interest Income Beats Estimates
The bank’s net interest income (NII) rose 11.8% to ₹15,371.4 crore during the July-September quarter.
The increase was supported by growth in lending activity, with net interest income exceeding market expectations despite pressure on overall profitability.
Loan Book Expands 23%
Total advances increased 23% year on year to ₹13.74 lakh crore as of September 30, reflecting growth across the bank’s major lending segments.
Retail loans grew 16%, SME lending expanded 25%, and corporate loans increased 34%. The figures indicate broad-based credit growth across individual borrowers, small and medium-sized enterprises, and corporate customers.
Deposits Grow 21%
Axis Bank’s total deposits climbed 21% year on year to ₹14.52 lakh crore on a month-end basis.
Term deposits increased 27%, savings-account deposits grew 12%, and current-account deposits rose 7%. Deposit growth remains important for supporting the bank’s lending expansion and funding requirements.
Higher Operating Costs Weigh on Earnings
Higher operating expenses were among the key factors preventing Axis Bank from meeting analyst profit estimates. Weaker non-interest income also limited the benefits of strong lending growth and reduced provisions.
The results highlight the challenge of translating credit expansion into higher profits while managing operating costs and maintaining income from sources beyond lending.
Other Income Declines
Other income, which includes earnings from investments and bonds, fell 1.4% to ₹6,531 crore during the quarter.
According to Reuters, rising bond yields and volatility in the rupee weighed on treasury earnings. The decline in other income added pressure to the bank’s overall profitability.
Operating Profit Grows 6%
Axis Bank’s operating profit increased 6% year on year to ₹11,083 crore, while core operating profit rose 11% to ₹10,998 crore.
Fee income also recorded growth, increasing 6% to ₹6,381 crore. These figures point to continued expansion in core banking activity, even as other income and operating expenses affected the bottom line.
Provisions Fall More Than 50%
Provisions for bad loans and other contingencies declined to ₹1,694 crore, down 52.2% from a year earlier.
Lower provisions supported the rise in net profit by reducing the amount set aside to cover potential credit losses. However, the sustainability of this benefit will depend partly on future loan performance and credit conditions.
Asset Quality Improves
The bank’s gross non-performing asset (NPA) ratio improved to 1.16%, compared with 1.28% in the previous quarter and 1.46% a year earlier.
Net NPA also declined to 0.35%, against 0.39% in the preceding quarter and 0.44% in the year-ago period. The improvement indicates a reduction in the proportion of loans classified as non-performing.
Fresh Slippages Decline
Gross loan slippages fell to ₹4,762 crore, compared with ₹5,566 crore in the previous quarter and ₹5,696 crore a year earlier.
The annualised net credit cost declined to 0.45%, reflecting lower credit-related pressure during the quarter. These trends, alongside improved NPA ratios, supported the bank’s earnings performance.
Net Interest Margin at 3.36%
Axis Bank reported a net interest margin (NIM) of 3.36% for the July-September quarter.
Excluding the effect of foreign-currency non-resident deposits, the margin stood at 3.47%. NIM measures the difference between interest earned on assets and interest paid on liabilities relative to interest-earning assets, making it a key indicator of lending profitability.
Capital Position Remains Strong
The bank’s capital adequacy ratio stood at 16.27%, while its common equity tier-1 (CET1) ratio was 14.61% at the end of September.
Axis Bank also reported additional provisions exceeding ₹8,000 crore over and above those reflected in its regulatory capital calculation. Capital adequacy remains an important measure of a bank’s ability to absorb potential losses and support future business growth.
CEO Highlights Digital and AI Push
Axis Bank Managing Director and CEO Amitabh Chaudhry said the lender remains focused on digital payments, secure banking, AI-driven innovation and strategic partnerships.
The bank continues to invest in technology while expanding its retail, SME and corporate banking operations. Digital initiatives and AI adoption are part of its broader efforts to improve services and strengthen its banking capabilities.
Strong Growth, but Cost Control Remains Key
Axis Bank’s second-quarter results reflect strong credit growth, improving asset quality and a significant decline in provisions. These factors helped drive the 37.6% annual increase in net profit.
However, the miss against analyst estimates highlights the importance of controlling operating expenses and sustaining income from non-interest sources. The bank’s ability to manage costs while maintaining lending growth and asset quality will remain important for its future earnings performance.
Source: Axis Bank, Reuters, Moneycontrol
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