Axis Bank Q1 net profit down 4% YoY; NII flat, provisions nearly double

Axis Bank on Thursday reported a 4 per cent year-on-year (YoY) decline in its standalone net profit for the first quarter of FY26 at Rs 5,806 crore, compared to Rs 6,035 crore in the same period last year. The dip in profit was primarily attributed to a sharp increase in provisions.

The bank's net interest income (NII) -- the difference between interest earned and interest expended -- remained flat at Rs 13,560 crore for the quarter.

Despite the muted top-line growth, Axis Bank's operating profit (before provisions and contingencies) rose 14 per cent YoY to Rs 11,515 crore, up from Rs 10,106 crore in Q1 FY25.

However, provisions and contingencies saw a significant rise, nearly doubling to Rs 3,948 crore in Q1 FY26 from Rs 2,039 crore in the same quarter last year. This increase weighed on the bottom line.

Sharing an update on its asset quality for the quarter ended June 30, 2025, the bank said it reported a gross NPA ratio of 1.57 per cent and a net NPA ratio of 0.45 per cent, up from 1.28 per cent and 0.33 per cent, respectively, as on March 31, 2025. Recoveries from written-off accounts during the quarter stood at Rs 904 crore.

Net slippages, after adjusting for these recoveries, came in at Rs 5,149 crore. This included Rs 5,210 crore from the retail segment, Rs 86 crore from the Commercial Banking Group (CBG), while the wholesale segment reported a net negative slippage of Rs 147 crore.

Gross slippages for the quarter rose to Rs 8,200 crore, up from Rs 4,805 crore in Q4 FY25 and Rs 4,793 crore in Q1 FY25. Recoveries and upgrades from NPAs stood at Rs 2,147 crore, while the bank wrote off NPAs worth Rs 2,778 crore during the quarter.

As of June 30, 2025, the provision coverage ratio (PCR) stood at 71 per cent, lower than 75 per cent at the end of March 2025 and 78 per cent a year ago.

The quarterly earnings were released post-market hours today. Earlier in the day, Axis Bank shares settled 0.68 per cent lower at Rs 1,159.85.