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 strong 14% year-over-year (YoY) growth in operating profit, reaching ₹11,515.00 crore, despite a 4% YoY decline in net profit due to technical factors affecting asset quality.

Key Financial Highlights

Asset Quality and Provisions

The bank's asset quality metrics were impacted by what it termed as "Technical Impact," which affected the recognition of slippages and upgrades. 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 the previous quarter
• Provision Coverage Ratio (PCR) was at 71%

The bank made provisions and contingencies of ₹3,948.00 crore for Q1 FY26, significantly higher than the ₹2,039.00 crore in Q1 FY25.

Business Growth

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

Digital Banking and Payments

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

• Continued to hold a market-leading position in UPI Payer PSP space with a market share of ~32%
• Ranked among the largest players in Merchant Acquiring business with a terminal market share of ~19.7%
• Acquired approximately 0.79 million new credit cards in Q1 FY26

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

The bank maintained a strong capital position:

• Overall Capital Adequacy Ratio (CAR) stood at 16.85%
• CET1 ratio improved to 14.68%, up 62 basis points YoY

While the bank's core operating performance remained strong, the impact of technical factors on asset quality metrics overshadowed the overall results. Axis Bank continues to focus on digital innovation and expanding its market share across various segments as it navigates the evolving banking landscape in India.

Consolidated Performance

On a consolidated basis, the Axis Bank Group reported:

The bank's subsidiaries continued to contribute positively to the group's performance, with steady growth observed across its various business verticals.

Investors and analysts will be closely watching how Axis Bank addresses the technical impact on its asset quality in the coming quarters while maintaining its growth trajectory in a competitive banking environment.

Axis Bank , one of India's leading private sector banks, has reported mixed financial results for the first quarter of fiscal year 2026 (Q1FY26). The bank saw growth in operating profit but a decline in net profit compared to the same period last year.

Operating Performance

Axis Bank's operating profit for Q1FY26 grew 14% year-over-year (YoY) to ₹11,515.00 crores, up from ₹10,106.00 crores in Q1FY25. This growth was driven by higher non-interest income and effective cost control. The bank's operating revenue increased by 8% YoY, while operating expenses grew by only 2% YoY.

Net Profit and Income

Despite the growth in operating profit, the bank's net profit decreased by 4% YoY to ₹5,806.00 crores in Q1FY26, compared to ₹6,035.00 crores in Q1FY25. This decline was primarily due to higher provisions and contingencies, which stood at ₹3,948.00 crores for the quarter, up 94% from ₹2,039.00 crores in the same quarter last year.

The bank's net interest income (NII) saw a modest 1% YoY increase to ₹13,560.00 crores. However, non-interest income grew significantly by 25% YoY to ₹7,258.00 crores, with fee income up 10% YoY to ₹5,746.00 crores.

Asset Quality

Axis Bank reported a slight increase in its gross non-performing assets (GNPA) ratio, which stood at 1.57% as of June 30, 2025, compared to 1.54% a year ago. The net NPA ratio also increased to 0.45% from 0.34% in the same period last year.

The bank attributed changes in asset quality parameters to the application of technical parameters for recognizing slippages and consequent upgrades, which it referred to as "Technical Impact."

Business Growth

The bank's advances grew by 8% YoY to ₹10,59,724.00 crores, with retail loans growing by 6% YoY. Total deposits increased by 9% YoY to ₹11,61,615.00 crores.

Digital Banking and Market Position

Axis Bank continued to maintain its strong position in digital banking and payments. It holds a market-leading position in the UPI Payer PSP space with a market share of approximately 32%. The bank also remains among the largest players in the merchant acquiring business with a terminal market share of about 19.7%.

Management Commentary

Amitabh Chaudhry, MD & CEO of Axis Bank, expressed optimism about the bank's future, stating, "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, innovative product suites are best suited to seize the opportunity."

Conclusion

While Axis Bank faced some challenges in Q1FY26, particularly in terms of net profit and asset quality, the bank demonstrated strength in its operating performance, business growth, and digital banking initiatives. The management remains confident about the bank's ability to capitalize on market opportunities in the coming quarters.

Investors and analysts will be watching closely to see how the bank navigates the evolving financial landscape and addresses the factors impacting its profitability in the subsequent quarters.