Lower provisioning and recoveries boost Axis, Kotak and IDBI profit in Q1; YES Bank bucks the trend

“NRI customers are showing strong interest in deposits, which could become a key source of deposit growth and liquidity for the bank,” Chaudhry remarked. | Photo Credit:
M.photostock

Axis Bank posted a stronger-than-anticipated performance for the June quarter, with net profit climbing 22.5% YoY to ₹7,114 crore. This was driven by a 44% drop in provisions to ₹2,223 crore, while net interest income (NII) increased 8% to ₹14,646 crore, supported by robust loan growth in corporate, SME and retail books. Asset quality stayed steady and the bank kept its ₹2,001 crore precautionary buffer for West Asia exposures.

“We keep delivering quality growth, fortifying our balance sheet and upholding a disciplined risk approach. We view the June quarter as the trough of the margin cycle,” said Amitabh Chaudhry, MD & CEO, Axis Bank.

Kotak Mahindra Bank also posted a 26% rise in net profit to ₹4,123 crore, marking its best earnings growth in two years. A 45% cut in provisions to ₹668 crore boosted profit, while net interest income (NII) rose 9.2% to ₹7,928 crore. Deposits increased 11.7% and loans grew 15%, driven by corporate and SME segments. Asset quality stayed stable, with gross NPA down to 1.38% and net NPA at 0.27%.

“Given the current climate, we focus on stability, profitability and efficiency while staying true to our strategy for the four core customer segments,” said Ashok Vaswani, MD & CEO, Kotak Mahindra Bank. “We have tuned growth in low‑ROE areas and those exposed to geopolitical risks, while exploiting stronger spreads in corporate lending and treasury market swings,” he added.

Meanwhile, IDBI Bank lifted net profit by 5.4% to ₹2,115 crore, helped by strong recoveries from stressed and written‑off loans. Recoveries and write‑backs jumped to ₹637 crore from ₹179 crore a year ago. Net interest income (NII) rose 10.1% to ₹3,486 crore, advances grew 22.2% and deposits increased 9.8%. Net NPA fell to 0.16% even as non‑interest income dipped and margins narrowed slightly.

In contrast, YES Bank’s profit gain came from stronger core operations, not from lower provisions. Net profit climbed 34% to ₹1,071 crore, backed by a 17.5% rise in net interest income (NII) to ₹2,786 crore. Loans expanded 18.3% to ₹2.85 lakh crore and deposits grew 14.3% to ₹3.15 lakh crore, while gross NPA eased to 1.3%.

“Our net profit rose despite a softening in some non‑core revenue streams, showing that our core recurring earnings engine is gaining traction,” said Vinay Tonse, MD & CEO, YES Bank. “Margins held steady at 2.7%, the cost‑to‑income ratio improved further, and asset quality improved as slippages eased,” he added.

Regarding FCNR(B) deposits, private banks noted keen NRI interest but held off on giving estimates before the end of September. “Deposits are attracting strong interest from NRI customers and could become a significant source of deposit growth and liquidity for the bank,” Chaudhry said.

Published on July 18, 2026