Axis Bank Q4 profit inches up 1.9 pc sets aside Rs 2K cr for war impact staff down 3 000 in FY26

    Mumbai, Apr 25 (PTI) Axis Bank's consolidated net profit for the March quarter inched up 1.89 per cent to Rs 7,631.72 crore, as the lender set aside Rs 2,001 crore towards the potential impact of the West Asia war on its loan book.
    On a standalone basis, the third-largest private-sector lender's net profit for the March quarter fell to Rs 7,071.31 crore from Rs 7,117.50 crore in the year-ago period and Rs 6,489.57 crore in the preceding December quarter.
    Its core net interest income moved up 5 per cent to Rs 14,457 crore in the reporting quarter on a 19 per cent growth in advances, but was restricted by a 0.35 per cent compression in the net interest margin to 3.62 per cent.
    The other income came at Rs 6,023 crore, down 11 per cent year-on-year.
     The bank had a one-time gain of Rs 2,193 crore on the tax front, including reversal of excess provisions made earlier, a reduction in tax expense done in FY25 and a recognition of deferred tax asset.
     It made a standard asset provision of Rs 2,001 crore towards any impact the Middle East conflict may have on its assets.
     Chief financial officer Puneet Sharma called it as a prudential, precautionary measure which is not driven by any deterioration in the assets, while chief executive and managing director Amitabh Chaudhry said its conservatism is a strategic advantage.
    Sharma said the bank has run risk analysis on the entire portfolio, as part of which it has identified a pool of assets which are most likely to face impact due to the conflict, but declined to specify either the number of such assets, outstandings in them, segment they come from or even sectors.
    As per Sharma, the excess provision will be able to take care of provisions in FY27, even if the worst case scenario of crude trading at USD 150 a barrel and a 20 per cent depreciation in currency plays out.
    It reported overall provisions of Rs 3,522 crore as against Rs 1,359 crore in the year-ago period.
    From an asset quality perspective, the gross slippages came down to Rs 4,709 crore during the quarter from the Rs 6,805 crore in year-ago period and Rs 6,007 crore in March quarter. The gross non-performing assets ratio improved to 1.23 per cent from 1.4 per cent in December.
    Wholesale advances led the loan growth with a 38 per cent expansion, while retail grew just 8 per cent. A senior official explained that the retail disbursements are looking up and it will take a few quarters to play out into the loan book growth, while Sharma specified that the bank is more comfortable growing the personal loans now.
    The overall business momentum and on-the-ground activity are fairly strong despite the war, an official said.
    The official said its subsidiary Axis Finance is yet to hit the Rs 1 lakh crore mark in assets under management required for it to be classified as an upper level NBFC and added that a call on fund infusion will be taken by the management of the company.
     Minutes after the call with journalists, Axis Bank announced a Rs 2,250 crore fund infusion into Axis Finance from Kedaara Capital and the bank itself, making the first fund raise from the private equity fund as the maiden external entity to pump money into the company.
     The subsidiaries reported a 16 per cent jump in the post tax net for FY26 at Rs 2,051 crore.
     Meanwhile, the bank reported a decline of over 3,000 staffers over FY26, taking the overall base down to 1.01 lakh at the end of March 31 this year.
     An official explained that this is largely driven by increased productivity from digital and technology-related investments over the years, and added that the impact of AI adoption will be felt on the staffing front in FY27.
    Most of the gains on the productivity front have been made in branches and customer touchpoints, he added.
     Overall capital adequacy for the lender stood at 16.42 per cent, and the bank has no plans for raising equity capital.

(This story has not been edited by THE WEEK and is auto-generated from PTI)