Improving asset quality, growth outlook brighten Axis Bank's prospects

Axis Bank's Q2FY26 profit falls amid higher provisions, but asset quality and loan growth show steady improvement

Axis Bank reported a sharp drop in net profit in the second quarter of financial year 2026 (Q2FY26) on higher provisions and weak operating profit growth while revenue growth was moderate. But loan growth and deposit growth improved to double-digits year-on-year (Y-o-Y) and asset quality also improved with the gross non-performing loan or NPL ratio moving down. 

While net interest margin (NIM) declined marginally, it was better than consensus. Slippages also declined. Credit costs for the quarter stood at ₹3,500 crore (around 130 basis points of loans, annualised) for Q2FY26, down from 150 basis points in Q1FY26.

The reported Q2FY26