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    Axis Bank

    AXISBANK
    Financial Services·26 Jan 2026
    Management Summary

    Axis Bank delivered strong Q3 FY26 results with robust growth in deposits (15% YoY) and advances (14% YoY), leading to a 28% QoQ increase in PAT to Rs. 6,490 crores. Operating performance remained steady with core operating revenue and profit up 7% YoY, and cost to assets improving by 15 bps YoY. However, NIM saw a 9 bps QoQ decline to 3.64%, and CASA ratio decreased. The bank remains well-capitalized and continues its focus on digital initiatives and strategic growth areas.

    Highlights

    5

    • Deposits growth momentum continued with month-end balances growing 5% QoQ and 15% YoY, and quarterly average balances growing 5% QoQ and 12% YoY.

    • Total advances grew 4% QoQ and 14% YoY, with Small business, SME and mid-corporate together growing at 5% QoQ and 22% YoY.

    • Core operating revenue was up 7% YoY and the core operating profit was up 7% YoY.

    • PAT was up 28% QoQ to Rs. 6,490 crores.

    • The Bank remains well capitalized with a CET 1 ratio of 14.50% and consolidated ROA improved 27 bps QoQ to 1.57%.

    Concerns

    4

    • NIM for Q3FY26 was 3.64%, down 9 bps QoQ.

    • QAB CASA declined 65 bps QoQ and 116 bps YoY to 37%.

    • NNPA increased 7 bps YoY to 0.42%, despite declining 2 bps QoQ.

    • Net slippages (adjusted for recoveries from written off pool) were Rs. 2,335 crores.

    What Changed1

    vs Q4 FY26

    Guidance items4 → 7 (+3)

    Key financials

    Single quarter

    24 metrics
    1. 01Deposits Growth (Month-end)—+15%YoY
    2. 02Deposits Growth (Quarterly Average)—+12%YoY
    3. 03CASA Growth—+14.0%YoY
    4. 04Total Advances Growth—+14.0%YoY
    5. 05Core Operating Revenue Growth—+7.0%YoY

    Segment breakdown

    Small Business, SME & Mid-Corporate Advances
    22% Growth5% Growth24% Share of Total Bank Loans
    Retail & CBG Advances
    68% Share of Total Advances (Dec-25)
    Retail Disbursements
    20% Growth12% Growth
    Domestic Subsidiaries (9M FY26)
    ₹1,490 Cr Net Profit52% Return on Investment
    Axis Finance
    22% Overall Assets Under Finance Growth56% Retail + MSME Share of Total Book₹571 Cr 9M FY26 PAT36% Net NPA
    Axis AMC
    11% Overall Quarterly Average AUM Growth₹3.6L Cr Overall Quarterly Average AUM₹454 Cr 9M FY26 PAT
    Axis Securities
    ₹270 Cr 9M FY26 PAT
    Axis Capital
    ₹178 Cr 9M FY26 PAT
    List

    Capital allocation

    1
    high confidence
    CategoryHeadline
    Liquidity

    Liquidity disclosed

    The Bank's CET-1 ratio stands at 14.50%. It has provisions aggregating to Rs. 6,243 crores, which have not been reckoned in the capital computation, translating to a capital cushion of ~43 bps. Management reiterated that they do not need equity capital for growth or protection, but may opportunistically evaluate issuing Tier-2 and AT-1 instruments as AT1 is currently due in September 2026. The impact of new LCR guidelines effective April 1st is expected to be broadly neutral.

    Guidance & targets

    7
    CategoryTargetPriority
    Profitability
    NIM
    3.80%
    		High
    Profitability
    Cost to Assets
    Improve (decline)
    		High
    Profitability
    NII Optimization
    Optimized
    		High
    Volume
    Deposit Growth
    Faster than industry
    		High
    Volume
    Optimal Loan Book Balance (Retail, Wholesale, SME)
    58-60% Retail, 23-25% Wholesale, balance SME
    		Medium
    Volume
    Asset Book Growth (vs industry)
    300 bps better than industry
    		High
    Liquidity
    LCR Impact from New Guidelines
    Broadly neutral
    		High

    NIM Trajectory for FY27

    Next quarter (after plan cycle decision)
    CurrentNII optimization strategy for FY26
    TargetNew NII optimization plan for FY27

    Why it matters

    NII optimization is a key driver of profitability, and the FY27 plan will indicate future margin strategy.

    Our comment for FY'26 was driven by the fact that we make these decisions on a plan cycle basis. So we are due for our plan cycle for FY'27. Once we've made the decision, we'd be happy to communicate.

    How to verify

    guidance_and_targets

    Risks & concerns

    3
    RiskSeverity

    Evolving Geo-political Environment and Macro Factors

    The bank remains vigilant to the evolving geo-political environment and its potential implications for the operating landscape. — Management acknowledged

    medium

    Sustained Divergence of Credit and Deposit Growth

    Credit growth cannot get ahead of deposit growth on a sustained basis; if deposit growth remains anemic, credit growth will come down. Convergence is expected in 15-18 months. — Management acknowledged

    high

    Competitive Environment for Deposits

    The re-pricing benefit on deposits may not fully materialize if the rate environment remains competitive through Q4 FY26. — Management acknowledged

    medium

    Q&A highlights

    8

    “3.8%, we remain confident of, it is rate cycle agnostic, which is why we say it's a through cycle NIM guidance. We are not walking away from that even today, despite the 125 basis points rate cut that we've seen. We remain confident that we will get to the 3.8% over the duration of our book.”

    Analyst questioned the confidence in 3.8% NIM guidance given corporate loan growth and potential mix effects, and management reiterated strong conviction.

    asked by Chintan from Autonomous

    2 min read6 chapters

    Detailed Narrative

    01

    Strong Growth in Deposits and Advances

    Axis Bank continued to deliver strong growth, with month-end deposits increasing 15% YoY and 5% QoQ, and quarterly average balances up 12% YoY and 5% QoQ. Total advances grew 14% YoY and 4% QoQ, with small business, SME, and mid-corporate segments showing robust growth of 22% YoY and 5% QoQ, constituting 24% of total bank loans. CASA balances also grew strongly by 14% YoY and 3% QoQ, contributing to the overall deposit momentum.

    02

    Profitability and Operating Performance

    The bank reported a PAT of Rs. 6,490 crores for Q3 FY26, a significant 28% QoQ increase and 3% YoY growth. Core operating revenue and core operating profit both grew 7% YoY. The cost to assets ratio improved by 15 bps YoY and 5 bps QoQ to 2.33%, indicating positive operating jaws. Consolidated ROA improved 27 bps QoQ to 1.57%, and ROE improved 264 bps QoQ to 14.15%, reflecting strong overall financial health.

    03

    Net Interest Margin (NIM) Dynamics

    NIM for Q3 FY26 stood at 3.64%, a 9 bps QoQ decline. This was influenced by a 17 bps QoQ decline in yields on interest-earning assets, partially offset by an 8 bps QoQ reduction in the cost of funds. Management reiterated its 'through cycle' NIM guidance of 3.80%, expressing confidence in achieving it over the duration of the book, despite recent rate cuts and competitive pressures in the deposit market.

    04

    Asset Quality and Provisions

    Asset quality remained resilient, with GNPA at 1.40% (declined 6 bps QoQ and YoY) and NNPA at 0.42% (declined 2 bps QoQ). The PCR stood at 70%. Net credit cost was 0.76%, down 4 bps YoY, and 0.63% (excluding technical impact), down 17 bps YoY and 1 bps QoQ. Gross slippages for the quarter were Rs. 6,007 crores, with retail contributing Rs. 5,472 crores, while net slippages were Rs. 3,135 crores, declining 11% YoY.

    05

    Strategic Focus and Digital Initiatives

    The bank continues to focus on building a resilient, all-weather franchise, strengthening its distribution footprint to over 6,000 branches, and leveraging digital platforms. Initiatives like Neo for Corporates and Neo for Business are scaling rapidly, serving over 4.3 lakh and 3.1 lakh customers respectively. The bank also pioneered omni-channel Express Banking Digital Points and introduced a UPI-powered, co-branded Rupay Credit Card with Google Pay, enhancing customer experience and operational efficiency.

    06

    Capital Position and Future Outlook

    Axis Bank remains well-capitalized with a CET 1 ratio of 14.50%. The bank holds provisions aggregating to Rs. 6,243 crores, providing a capital cushion of approximately 43 bps. Management stated they do not need equity capital for growth or protection and may opportunistically evaluate issuing Tier-2 and AT-1 instruments, with AT1 due in September 2026. The bank aims to sustainably outpace sector growth in the medium to longer term, while remaining vigilant to the evolving geo-political environment.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.