Axis Bank Q1FY27 Net Profit Rises 22.5% to ₹7,114 Crore as Provisions Decline

Axis Bank reported a 22.5% year-on-year increase in standalone net profit to ₹7,113.92 crore for the quarter ended June 30, 2026. The improvement was primarily supported by a substantial reduction in provisions and contingencies, despite weaker other income and higher interest expenses.

According to the bank’s exchange filing, net interest income increased by 8% to ₹14,646.10 crore in Q1FY27. Operating profit, however, recorded a moderate growth of 1.3% to ₹11,659.10 crore, reflecting continued pressure from operating costs and non-interest revenue.

Provisions and contingencies declined by 43.7% to ₹2,222.54 crore from ₹3,947.66 crore in the corresponding quarter of the previous financial year. The lower provisioning requirement helped profit before tax increase by 24.8% to ₹9,436.56 crore, notwithstanding a higher tax expense.

Interest earned during the quarter rose by 9.4% to ₹33,985.63 crore. At the same time, interest expenditure increased at a faster rate of 10.5% to ₹19,339.53 crore, restricting the pace of growth in net interest income.

Other income declined by 7.2% to ₹6,735.42 crore due to lower non-interest revenue. Operating expenses increased by 4.5% to ₹9,722.42 crore, further limiting growth in operating profit.

Employee expenses decreased to ₹3,058 crore from ₹3,261.75 crore in Q1FY26. However, other operating expenses increased to ₹6,664.42 crore from ₹6,040.90 crore. Consequently, total expenditure excluding provisions rose by 8.4% to ₹29,061.95 crore.

The bank’s asset-quality indicators remained broadly stable as of June 30, 2026. The gross non-performing asset ratio stood at 1.28%, while the net NPA ratio was 0.39%. Return on assets improved to 1.51% from 1.47% in the year-ago quarter.

Axis Bank’s Q1FY27 results indicate that lower credit provisions drove the strong increase in profitability. Growth in core operations remained comparatively restrained due to elevated funding costs, increased operating expenses and reduced non-interest income.

Axis Bank shares closed at ₹1,329.40 on the National Stock Exchange on Friday, recording an increase of nearly 2%. CA Sansaar