Axis Bank Q2 Results: Net Profit Rises 38% to ₹7,003 Crore as GNPA Falls to 1.16%
Axis Bank Q2 results for FY27 show standalone net profit up 38% year on year to ₹7,003 crore, supported by higher net interest income and a 52% drop in provisions. The third-largest private sector lender also said it will deploy the ₹1.018 trillion (about ₹1 lakh crore) raised through foreign currency non-resident (FCNR-B) deposits either to replace high-cost deposits or to fund loan growth.
Axis Bank Q2 Results: Key Numbers
The figures below are from the bank's Q2FY27 results (quarter ended September 30, 2026) and are standalone unless stated.
| Indicator | Q2FY27 | Change / Comparison |
|---|---|---|
| Net profit | ₹7,003 crore | +38% YoY |
| Net interest income (NII) | ₹15,371 crore | +12% YoY |
| Net interest margin (NIM) | 3.36% | 3.55% a year earlier |
| NIM excluding FCNR(B) impact | 3.47% | 3.46% in preceding quarter |
| Core operating profit | ₹10,998 crore | +11% YoY |
| Core operating revenue | ₹21,817 crore | +10% YoY |
| Other income | ₹6,531 crore | -1% YoY |
| Fee income | ₹6,381 crore | +6% YoY |
| Trading income | ₹85 crore | ₹498 crore a year earlier (about -83%) |
The reported NIM is about 19 basis points lower than a year earlier. The bank's figure excluding the FCNR(B) impact was 3.47%, which indicates the deposits are weighing on the headline margin. The cost-to-assets ratio declined 24 basis points YoY to 2.14%. Return on assets was 1.49% and return on equity 13.96%.
How Axis Bank Plans to Use the FCNR(B) Funds
Executive Director Subrat Mohanty said on the media call that the bank will use the FCNR(B) money in one of two ways: substituting high-cost deposits as they come up for renewal, or continuing to drive advances growth. He said the bank would stay adaptive to market conditions. The bank has already used part of the funds in Q2 to retire or substitute expensive deposits, and he said there are multiple levers on both cost of funds and asset mix.
Asset Quality Improves
Provisions and contingencies fell 52% YoY to ₹1,694 crore, and annualised credit cost declined to 0.45%.
| Indicator | Earlier period | Q2FY27 |
|---|---|---|
| Gross NPA ratio | 1.28% (preceding quarter) | 1.16% |
| Net NPA ratio | 0.39% (preceding quarter) | 0.35% |
| Gross slippages | ₹5,696 crore (year earlier); ₹5,566 crore (preceding quarter) | ₹4,762 crore |
| Provision coverage ratio (excl. prudential write-offs) | 70% | 70% |
Gross slippages are about 16% lower than a year earlier and about 14% lower than in the preceding quarter. Recoveries and upgrades from NPAs stood at ₹2,380 crore, while write-offs were ₹2,729 crore. The overall coverage ratio stood at 164%.
Loan and Deposit Growth
Advances grew 23% YoY and 9% sequentially to ₹13.74 trillion at the end of September. Deposits rose 21% YoY to ₹14.52 trillion. Advances were therefore about 94.6% of deposits.
| Segment | Amount | Growth YoY |
|---|---|---|
| Total advances | ₹13.74 trillion | +23% |
| Retail loans | ₹7.4 trillion (54% of net advances) | +16% |
| SME loans | ₹1.65 trillion | +25% |
| Corporate advances | ₹4.69 trillion | +34% |
| Total deposits | ₹14.52 trillion | +21% |
Term deposits grew 27%, while current account and savings account deposits rose 7% and 12% respectively. The CASA ratio declined to 36% from 40% a year earlier. Management said it had not yet revised retail term deposit rates following the policy rate hike, while bulk deposit rates were being adjusted to reflect market conditions.
Fee Income and Insurance Distribution Proposals
Other income fell 1% YoY, mainly because trading income dropped to ₹85 crore from ₹498 crore. Fee income rose 6%. On the insurance regulator's proposed changes to distribution rules, Mohanty said the proposals are still at the consultation stage, which gives the bank time to prepare. He said the bank could respond by increasing volumes, changing its product mix and working with insurance partners, and that the impact on fee income remains uncertain.
Capital Position and Leadership Changes
The capital adequacy ratio stood at 16.27% at the end of September, with the common equity tier-1 ratio at 14.61%. Domestic subsidiaries reported combined first-half FY27 profit after tax of ₹1,210 crore, up 29% YoY.
The board appointed former SEBI whole-time member Ananth Narayan as an additional independent director, effective October 19, 2026. It also appointed Rahul Shukla as group head of Commercial and Bharat Banking.
What to Watch
Ananth Narayan's appointment takes effect on October 19, 2026. The insurance regulator's distribution rules are still at the consultation stage, and the bank said retail term deposit rates have not yet been revised following the policy rate hike.
