Axis Bank profit rose 38% year over year to Rs 7,003 crore in the quarter ended September 30, 2026, supported by expanding lending, higher net interest income and improving asset quality. The second-quarter FY2026–27 result was nevertheless 2% below the preceding quarter, distinguishing the strong annual improvement from the bank’s sequential performance.
Key Takeaways
- Net interest income increased 11.8% year over year to Rs 15,371 crore.
- Advances grew 23%, or 19% excluding the specified FCNR(B)-related balance-sheet impact.
- Gross and net bad-loan ratios declined, alongside lower annualized credit costs.
Table of Contents
- Axis Bank profit grows faster than core operating earnings
- Loan growth outpaces deposits
- Margin measures show the FCNR(B) effect
- Bad-loan ratios and credit costs improve
- Conclusion
Axis Bank profit grows faster than core operating earnings
The bank’s Q2 FY27 results announcement showed profit after tax rising from Rs 5,090 crore a year earlier, while core operating profit increased 11% to Rs 10,998 crore. Compared with the preceding quarter, core operating profit fell 1%.
Net interest income—the difference between interest earned and interest paid—rose 5% sequentially. Operating expenses increased 9% year over year and 11% from the previous quarter to Rs 10,819 crore, tempering the benefit from stronger income.
| Item | Details |
|---|---|
| Core operating revenue | Rs 21,817 crore; up 10% year over year |
| Fee income | Rs 6,381 crore; up 6% year over year |
| Total capital adequacy ratio | 16.27% at September 30, 2026 |
| Common Equity Tier 1 ratio | 14.61% at September 30, 2026 |
| Average liquidity coverage ratio | Approximately 119% during Q2 FY27 |
Loan growth outpaces deposits
Net advances reached Rs 13,73,727 crore, up 23% year over year and 9% sequentially. Corporate loans grew 34% annually, small and medium enterprise loans increased 25%, and retail loans rose 16%.
Quarter-end deposits increased 21% year over year to Rs 14,52,066 crore. Excluding the period-end impact of foreign currency non-resident bank deposits backed by advances from Axis Bank’s international branches, advances grew 19% and deposits rose 17%.
That distinction matters because the headline balance-sheet expansion includes this specific funding-and-lending arrangement, rather than reflecting only growth in other banking business.
Margin measures show the FCNR(B) effect
Reported net interest margin stood at 3.36%. Excluding the impact of FCNR(B) deposits, the margin was 3.47%, compared with 3.46% in the preceding quarter.
The exclusion therefore produces a margin 11 basis points above the reported figure. On that basis, quarterly profitability from interest-earning assets was broadly stable even as lending volumes expanded.
Bad-loan ratios and credit costs improve
The gross nonperforming asset ratio declined to 1.16% from 1.46% a year earlier, while the net ratio fell to 0.35% from 0.44%. Both measures also improved from the preceding quarter.
Annualized net credit cost was 0.45%, down 28 basis points year over year and 18 basis points sequentially. Together, these measures show that the larger loan book was accompanied by lower reported credit stress, rather than growth alone.
Conclusion
The September-quarter results combined rapid loan growth with improving credit quality, but profit and core operating earnings eased sequentially. The next quarterly results will provide the next comparison for margins, lending growth and credit costs.
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