Axis Bank Q2 Profit Drops 25% Due to One-Time Provision
Axis Bank reported a 25% year-on-year decline in net profit to ₹5,557.5 crore for Q2 FY26, primarily due to a one-time provision of ₹1,231 crore for discontinued crop loan schemes following an RBI advisory.
Key Takeaways
- Net profit fell 25% YoY to ₹5,557.5 crore
- One-time provision of ₹1,231 crore for crop loans
- Net Interest Income grew 1.9% to ₹13,744 crore
- Asset quality improved with gross NPA ratio at 1.46%
Provision Impact and Recovery Timeline
The bank made a standard asset buffer provision of ₹1,231 crore for two discontinued crop loan variants. This provision will be written back to the profit and loss account once all loans under these schemes are repaid or closed by March 31, 2028.
Asset Quality Shows Stability
Despite the profit decline, Axis Bank maintained stable asset quality. The gross NPA ratio improved to 1.46% from 1.57% in the previous quarter, while net NPA remained nearly flat at 0.44%. In absolute terms, gross NPAs reduced to ₹17,308 crore from ₹17,764 crore.
Business Growth Metrics
The bank’s advances grew 11.7% year-on-year to ₹11.16 lakh crore, while deposits increased 10.7% to ₹12.03 lakh crore. The RBI’s annual inspection found no divergence in asset quality or provisioning.
Slippages and Recoveries
Gross slippages during the quarter stood at ₹5,696 crore, lower than ₹8,200 crore in the June quarter but higher than ₹4,443 crore in the same period last year. The bank recorded recoveries and upgrades of ₹2,887 crore and wrote off bad loans worth ₹3,265 crore.
Axis Bank shares closed 0.4% lower at ₹1,172.5 ahead of the results announcement, though the stock has gained approximately 6% over the past month.
