Mumbai: Private lender Axis Bank on Wednesday reported a 4 percent year-on-year drop in net profit, to Rs 5806 crore for the April-June quarter (Q1FY26) due to provisions for higher bad loans.The higher provisions were because the bank made changes to its asset classification and income recognition policies. In Q1FY26, the bank reported fresh slippages of Rs 8,200 crore, up 71 per cent Y-o-Y and sequentially. Of this, Rs 7,500 crore is from the retail segment. Net Interest income rose one per cent Y-o-Y increase to Rs 13,560 crore while other income (comprising of fee, trading and miscellaneous income) for Q1FY26 grew 25 per cent Y-o-Y at Rs 7,258 crore. The Bank’s Net interest margin (NIM), a key profitability metric, stood at 3.8 per cent, down 17 bps from last quarter, and 25 bps from the corresponding period of last year. The bank’s growth in advances for the quarter was muted at 8 per cent Y-o-Y, and 2 per cent sequentially to Rs 10.59 lakh crore with retail loans growing 6 per cent Y-o-Y to Rs 6.22 lakh crore. Deposit book of the bank grew 9 per cent Y-o-Y to Rs Rs 11.61 lakh crore. Asset quality deteriorated slightly with Gross NPA rising to 1.57 per cent from 1.54 per cent and Net NPA rising to 0.45 per cent from 0.34 per cent last year. “Prudent application of technical parameters for recognising slippages, and consequent upgrades impacted reported asset quality parameters, including provisions and contingencies for Q1FY26. Technical impact is largely restricted to cash credit and overdraft products, and one-time settled accounts,” the bank said in a statement, adding that “technical impact” has adversely impacted the bank’s net profit by Rs 614 crore, return on assets (ROA) by 15 basis points (bps), and return on equity (ROE) by 1.4 per cent.”
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