Axis Bank Reports Q2FY26 Financial Performance: Net Profit Declines While Fee Income Grows

Axis Bank revealed its financial performance for the quarter and half-year ending September 30, 2025. The bank's operating profit for the quarter was Rs 10,413 crores, marking a 3% decrease year-on-year. The core operating profit stood at Rs 9,915 crores. Net profit for Q2FY26 fell by 26% to Rs 5,090 crores from Rs 6,918 crores in Q2FY25.

Net Interest Margin (NIM) for Q2FY26 was recorded at 3.73%, while Net Interest Income (NII) reached Rs 13,745 crores. This represents a 1% increase quarter-on-quarter and a 2% rise year-on-year. For the half-year ending September 30, 2025, NII grew by 1% to Rs 27,304 crores.

Fee income saw a significant rise of 10% year-on-year, reaching Rs 11,783 crores. Operating profit for H1FY26 increased by 5%, moving from Rs 20,819 crores in H1FY25 to Rs 21,928 crores. Core operating profit also saw a growth of 4%, climbing from Rs 19,238 crores in H1FY25 to Rs 20,010 crores in H1FY26.

The bank's balance sheet expanded by 11% year-on-year to Rs 16,76,614 crores as of September 30, 2025. Total deposits grew by 4% quarter-on-quarter and by 11% year-on-year on a month-end basis. Current account deposits increased by 13% year-on-year, while savings account deposits rose by 4% quarter-on-quarter and by 6% year-on-year.

As of September end, advances increased by 12% year-on-year and by 5% quarter-on-quarter to reach Rs 11,16,703 crores. Retail loans accounted for a significant portion of net advances at 57%, growing by 2% quarter-on-quarter and by 6% year-on-year to Rs 6,35,460 crores.

The bank's Gross Non-Performing Asset (NPA) ratio was reported at 1.46%, with Net NPA at 0.44%. These figures showed an improvement from June's figures of 1.57% and 0.45%, respectively. Recoveries from written-off accounts amounted to Rs 641 crores during the quarter.

Operational Network Expansion

Axis Bank expanded its distribution network significantly over the past year. As of September end, the bank operated a total of 5,976 domestic branches and extension counters along with 259 Business Correspondent Banking Outlets across 3,238 centers. This is an increase from the previous year's figures of branches and BCBOs spread across fewer centers.

The bank's provision coverage ratio stood at 70% as of September end compared to June's figure of 71%. Gross slippages for the quarter were reported at Rs 5,696 crores compared to Q1FY26's gross slippages of Rs 8,200 crores and Q2FY25's gross slippages of Rs 4,443 crores.

CEO's Insights on Strategic Focus

Amitabh Chaudhry, MD&CEO of Axis Bank stated: "This quarter, we continued to push ourselves as an institution to deliver meaningful progress. From enhancing digital safety to expanding access to credit and empowering entrepreneurs, our innovations are designed to serve real needs with precision and scale. We believe true transformation is not just about technology; it's about relevance, strength, and responsibility."

The bank's CASA deposits made up about 40% of total deposits. On a Quarterly Average Balance (QAB) basis, overall deposits rose by 3% quarter-on-quarter and by 10% year-on-year. Savings account deposits increased by both quarterly and yearly metrics while current account deposits showed similar growth patterns.

Axis Bank operated a total of 13,177 ATMs and cash recyclers nationwide as of September end. The Axis Virtual Center had expanded its team to include over one thousand seven hundred Virtual Relationship Managers spread across eight centers.