Axis Bank , India's third-largest private sector bank, announced its financial results for the first quarter of fiscal year 2026 (Q1 FY26) on July 17, 2025. The bank reported a robust 14% year-over-year (YoY) growth in operating profit, driven by higher non-interest income and effective cost control measures.

Key Financial Highlights

• Operating profit increased by 14% YoY to ₹11,515.00 crore in Q1 FY26
• Net Interest Income (NII) grew by 1% YoY to ₹13,560.00 crore
• Non-interest income surged by 25% YoY, with fee income up by 10%
• Net profit declined by 4% YoY to ₹5,806.00 crore, impacted by technical factors
• Cost to assets ratio improved to 2.41%, down 13 basis points YoY

Asset Quality and Provisions

The bank's asset quality metrics were affected by what it termed as "Technical Impact," which is largely restricted to cash credit and overdraft products and one-time settled accounts. As a result:

• Gross Non-Performing Assets (GNPA) ratio stood at 1.57%, up from 1.28% in the previous quarter
• Net Non-Performing Assets (NNPA) ratio increased to 0.45% from 0.33% in Q4 FY25
• Provision Coverage Ratio (PCR) was at 71%
• Credit cost (annualized) for Q1 FY26 was 1.38%

The bank stated that ₹821.00 crore of provisions and contingencies debited to the Profit and Loss Account is attributable to this Technical Impact.

Business Growth

Axis Bank continued to show strong growth across various business segments:

• Total deposits grew by 9% YoY, with CASA (Current Account Savings Account) deposits ratio at 40%
• Advances increased by 8% YoY and 2% quarter-on-quarter (QoQ) to ₹10,59,724.00 crore
• Retail loans grew by 6% YoY, accounting for 59% of the net advances
• SME loans saw a robust growth of 16% YoY

Digital Banking and Payments

The bank maintained its strong position in digital banking and payments:

• Axis Bank holds a market-leading position in UPI Payer PSP space with a market share of ~32%
• ~0.79 million credit cards were acquired in Q1 FY26
• The bank's mobile app, 'open by Axis Bank', continues to be among the world's top-rated mobile banking apps

Management Commentary

Amitabh Chaudhry, MD & CEO of Axis Bank, commented on the results: "We are optimistic as we step into FY26. With supportive regulatory conditions, the operative landscape is turning favorable. We believe large, well-capitalized banks like Axis with strong digital capabilities and innovative product suites are best suited to seize the opportunity."

Capital Adequacy and Liquidity

The bank maintains a strong capital position with:

• Overall Capital Adequacy Ratio (CAR) at 16.85%
• CET1 ratio at 14.68%, up 62 basis points YoY
• Average Liquidity Coverage Ratio (LCR) during Q1 FY26 at ~119%

Despite the impact of technical factors on asset quality, Axis Bank's Q1 FY26 results demonstrate its resilience and growth potential in key business areas. The bank's focus on digital banking, strong deposit growth, and improved cost efficiency positions it well for future growth in the evolving banking landscape.

Consolidated Performance

On a consolidated basis, the Axis Bank Group reported:

• Net profit of ₹6,244.00 crore for Q1 FY26
• Total income of ₹40,401.00 crore, up from ₹37,796.00 crore in Q1 FY25
• Consolidated Return on Equity (ROE) at 13.57%

The bank's subsidiaries also showed steady performance, contributing to the overall growth of the Axis Bank Group.

As Axis Bank navigates through the technical impact on its asset quality, its strong operational performance and strategic initiatives in digital banking and customer-centric products are expected to drive sustainable growth in the coming quarters.

Axis Bank , India's third-largest private sector bank, has announced its financial results for the first quarter, showcasing robust growth in key metrics despite a slight dip in net profit.

Operating Performance

The bank reported a strong 14% year-on-year (YoY) increase in operating profit, which stood at ₹11,515.00 crore for Q1. This growth was primarily driven by higher non-interest income and effective cost control measures. The operating revenue saw an 8% YoY rise, while operating expenses grew by a modest 2% YoY.

Income and Profitability

Axis Bank's net interest income (NII) grew marginally by 1% YoY to ₹13,560.00 crore. However, the bank witnessed a significant 25% YoY jump in non-interest income, with fee income rising by 10% YoY. The bank's net profit for Q1 stood at ₹5,806.00 crore, marking a 4% YoY decrease, primarily due to higher provisions.

Asset Quality and Provisions

The bank's asset quality showed mixed trends:

• Gross Non-Performing Assets (GNPA) ratio: 1.57% (up from 1.28% in the previous quarter)
• Net NPA ratio: 0.45% (up from 0.33% in the previous quarter)
• Provisions: ₹3,948.00 crore (significantly higher than ₹2,039.00 crore in the same quarter of the previous year)

Business Growth

The bank's CASA (Current Account Savings Account) ratio stood at 40% as of the end of the quarter.

Digital Banking and Subsidiaries

Axis Bank continued to strengthen its digital banking offerings, with its mobile banking app rated among the top globally. The bank's subsidiaries also performed well, with the total profit from domestic subsidiaries up 4% YoY to ₹451.00 crore in Q1.

Management Commentary

Amitabh Chaudhry, MD & CEO of Axis Bank, expressed optimism about the bank's future, stating:

"We are optimistic as we step into the new fiscal year. With supportive regulatory conditions, the operative landscape is turning favorable. We believe large, well-capitalized banks like Axis with strong digital capabilities and innovative product suites are best suited to seize the opportunity."

The bank's focus on digital innovation, strategic partnerships, and customer-centric initiatives continues to drive its growth trajectory in an evolving banking landscape.