Axis Bank, one of India’s leading private sector banks Aannounced Q2 FY26 Financial Result. In the second quarter (Q2), Axis Bank made a profit of ₹5,090 crore, but this is 25% less than the profit it made in the same quarter last year.
Even though the bank earned a little more from its core business of lending — with net interest income going up by 2% to ₹13,744 crore — its overall profit still went down a lot.
Analysts had expected higher profits (₹5,838 crore), but the bank had to set aside money (called a provision) to cover bad loans (loans that might not be repaid), which reduced its profit.
Key Highlights (July–Sept Quarter):
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Net Interest Income (NII) — the bank’s core earnings from lending — grew slightly by 2% to ₹13,745 crore.
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Provisions and contingencies (money set aside for possible loan losses) increased by 61% to ₹3,547 crore.
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Net Interest Margin (NIM), which shows how much the bank earns from lending after costs, fell slightly from 4.1% to 3.8%. This drop may be was due to the RBI cutting interest rates by 1% this year.
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Gross Non-Performing Assets (NPA) — bad loans that aren’t being repaid — rose a bit to 1.5% from 1.4% last year.
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Net NPA, after accounting for recoveries and provisions, was at 0.4%, slightly up from 0.3% last year.
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Gross slippages (new bad loans during the quarter) were ₹5,696 crore, lower than the previous quarter’s Rs 8,200 crore, but higher than Rs 4,443 crore a year ago.
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The bank recovered/upgraded loans worth Rs 2,887 crore, and wrote off Rs 3,265 crore in bad loans.
Why the profit falls?
The main reason for the drop in profit is a one-time provision of ₹1,231 crore for certain old crop loans (loans to farmers) that are no longer being given out. The Reserve Bank of India (RBI) asked the bank to make this provision after its annual inspection. Even though the bank believes these loans are safe and fully secured, it had to make this accounting adjustment.
CEO Amitabh Chaudhry said they are optimistic about recent GST and CRR cuts (which can boost the economy and lower bank costs). He also mentioned they are seeing positive trends in retail (personal) loans and continued strength in corporate loans.
CFO Puneet Sharma said the crop loans causing the one-time provision are safe, and this money will be recovered or written back before March 2028, when the loans are repaid or closed.
Axis Bank made slightly more money from lending, but profits dropped because of a one-time expense related to old farm loans. Income grew only slightly and the loan quality is improving, but new bad loans are still a concern. However the bank’s overall loan health is still solid, and it’s hopeful about future growth thanks to economic policy changes and loan demand.
On the day of the result (October 15), Axis Bank’s share price on the NSE fell 0.4% to Rs 1,172.5.
