Axis Bank Q3 profit rises 3% as loan growth stays strong
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Asset quality showed improvement, with gross non-performing assets falling to 1.40%, while net NPAs experienced a marginal increase. Provisions climbed compared to the previous year but dropped quarter-on-quarter. The bank confirmed no discrepancies in asset classification were identified post-RBI review.
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ANUSHREE FADNAVIS
Axis Bank posted modest growth in standalone net profit for Q3FY26, rising 3% year-over-year to ₹6,490 crore, driven by strong expansion in loan portfolios and deposits.
As India’s third-largest private lender, the bank had recorded a net profit of ₹6,304 crore during the same quarter last fiscal. Sequentially, Q3 profits surged 27.5% from ₹5,090 crore in Q2FY26.
Interest earnings growth
Net interest income climbed 5% to ₹14,287 crore from ₹13,606 crore in Q3FY25. Net interest margins contracted by 31 basis points to 3.75% against 4.06% a year earlier.
Non-interest revenue, including fees and trading gains, grew 4% to ₹6,226 crore (₹5,972 crore).
Increased provisions
Provisions for bad loans rose 5.6% yoy to ₹2,307 crore (₹2,185 crore). Gross NPA ratio improved to 1.40% as of December 2025 versus 1.46% a year prior, though net NPAs inched up to 0.42% from 0.35%.
Credit expansion
Net advances grew 14% yoy to ₹11.59 lakh crore by December 2025, led by corporate banking (27% growth), SME lending (22%), and retail loans (6%).
Deposit growth
Total deposits increased 15% to ₹12.61 lakh crore. The average CASA ratio dipped to 37% of domestic deposits from 39%.
Regulatory update
Following RBI’s FY25 inspection, the bank in Q2FY26 created an additional standard asset provision of ₹1,231 crore for two discontinued farm loan products. Borrower terms remain unaffected.
Provision reversal timeline
This provision will be reversed upon full recovery of outstanding loans in these categories or by March 31, 2028—whichever comes first. The RBI found no divergence in asset classification or provisioning during its review.
Published on January 26, 2026
