Axis Bank profit up 23% as balance sheet expands 20%
India's Axis Bank posted a 23% jump in first-quarter net profit, beating analyst estimates for net interest income, even as sequential asset quality metrics showed slight deterioration.
Axis Bank reported a net profit of Rs 7,114 crore for the first quarter of financial year 2027, a 23% increase from the same period a year earlier. Net interest income rose 8% year-on-year to Rs 14,646 crore, surpassing estimates from both Nomura and Kotak Institutional. The private lender's net interest margin held steady at 3.46%.
The earnings were underpinned by a 20% year-on-year expansion in the bank's balance sheet, reaching Rs 19.22 lakh crore by June 30. Total advances grew 19% annually to Rs 12.62 lakh crore. Beyond a core retail book that grew 8% year-on-year to Rs 6.76 lakh crore, small business banking and rural portfolios expanded 18% and 16% respectively.
Retail loans accounted for 54% of net advances, carrying a heavily secured risk profile. Secured loans made up 73% of the retail segment, driven largely by home loans which comprised 26% of the retail book.
Deposit growth kept pace, rising 18% year-on-year. However, the funding mix shifted toward term deposits, which surged 23%, compared to 14% growth in savings accounts and 6% in current accounts. Consequently, the share of low-cost current account savings account deposits stood at 38% of the total.
Asset quality showed mixed signals. Gross non-performing assets fell 4% year-on-year to Rs 17,124 crore, but the gross NPA ratio ticked up sequentially to 1.28% from 1.23% in the previous quarter. Net NPA ratios followed suit, improving to 0.39% from a year ago but rising from 0.37% sequentially. The net slippage ratio did decline sharply, falling 121 basis points year-on-year to 1.12%.
Return on average assets improved marginally to 1.51% from 1.47% a year earlier, while net worth climbed 14% to Rs 2.03 lakh crore. Shares of Axis Bank closed at Rs 1,328.50 on Friday, gaining 2% on the day and bringing the year-to-date return to over 4%.
Amitabh Chaudhry, the bank's managing director and chief executive, attributed the performance to strategic investments in technology. “As customer expectations evolve and technology continues to reshape financial services, Axis Bank’s focus remains on building a franchise that combines trust, innovation and resilience at scale,” Chaudhry said.
