Axis Bank's Q2 net profit falls 25 pc to Rs 5,557.5 crore
Mumbai, Oct 15
Private lender Axis Bank Limited on Wednesday reported a 25 per cent year-on-year (YoY) drop in its net profit to Rs 5,557.5 crore for the quarter ended September 2025 (Q2 FY26).
The decline was mainly due to a one-time provision of Rs 1,231 crore made for two discontinued crop loan variants following an advisory from the Reserve Bank of India (RBI), according to its stock exchange filing.
The Mumbai-based lender said this provision, made as a standard asset buffer, will be written back to the profit and loss account once all loans under the discontinued schemes are repaid or closed by March 31, 2028.
This move led to a drag on the bank's bottom line for the quarter. Net Interest Income (NII) -- the bank's core income from lending -- rose 1.9 per cent YoY to Rs 13,744 crore, the lender added in its filing.
Despite the impact on profit, asset quality remained stable. The bank's gross non-performing assets (NPA) ratio improved to 1.46 per cent from 1.57 per cent in the June quarter, while Net NPA stood nearly flat at 0.44 per cent, compared to 0.45 per cent in the previous quarter.
In absolute terms, gross NPAs came down to Rs 17,308 crore from Rs 17,764 crore in June, and net NPAs stood at Rs 5,114 crore.
The bank also clarified that no divergence in asset quality or provisioning was found during the RBI's annual inspection.
Gross slippages -- fresh additions to NPAs -- stood at Rs 5,696 crore during the quarter, lower than Rs 8,200 crore in the June quarter but higher than Rs 4,443 crore in the same period last year.
Recoveries and upgrades were Rs 2,887 crore, while the bank wrote off bad loans worth Rs 3,265 crore.
Axis Bank's advances grew 11.7 per cent YoY to Rs 11.16 lakh crore, and deposits increased 10.7 per cent to Rs 12.03 lakh crore from Rs 10.86 lakh crore in the same quarter last year.
Shares of Axis Bank closed 0.4 per cent lower at Rs 1,172.5 on Wednesday ahead of the results. The stock, however, has gained about 6 per cent in the past one month.
— IANS
Reader Comments
As an Axis Bank customer, I'm happy to see the NPA ratio improving. That's more important than quarterly profits. The bank's fundamentals remain solid with 11.7% loan growth. This dip might be a buying opportunity for investors.
₹1,231 crore provision for crop loans is quite significant. While it's good they're following RBI norms, I hope this doesn't affect retail customers like us. The bank should focus more on digital services and better customer experience.
The numbers look better than headline suggests. Gross NPAs down, advances up 11.7%, and the provision will be written back by 2028. This seems like temporary accounting impact rather than operational weakness. Smart investors will see through this.
Writing off ₹3,265 crore in bad loans while making provisions for crop loans shows the bank is cleaning up its books. This short-term pain should lead to long-term gain. Deposit growth at 10.7% is also healthy for the banking sector.
While the one-time provision explains the profit drop, I'm concerned about gross slippages of ₹5,696 crore being higher than last year. The bank needs to be more transparent about which sectors are causing these fresh NPAs.
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