Not seeing impact of US tariffs on asset quality so far, Axis Bank says
This story was originally published at 19:56 IST on 15 October 2025
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--Axis Bank: Retail asset quality stabilising, Q2 net slippages fell YoY
--CONTEXT: Comments by mgmt of Axis Bank in post-earnings press call
--Axis Bank: Tariffs haven't impacted our portfolio much so far
NEW DELHI/KOLKATA – Axis Bank Wednesday said that although certain sectors have been impacted by the 50% US tariffs imposed on Indian goods, the bank's portfolio has not seen a significant impact on asset quality. "The full effect is yet to play out and obviously, the market is hopeful of a trade deal at some point in time in the near future. So it's an evolving situation," the management of Axis Bank told reporters in a post-earnings media call
The bank is tracking the impact of these tariffs on sectors such as textiles, gems and jewellery, electronic parts, and pharmaceuticals. However, Axis Bank's exposure to the gems and jewellery sector is very limited.
The management said the bank has made an additional one-time standard asset provision of INR 12.31 billion for two discounted crop loan variants. "The bank was offering one of these product variants from 2015 and the other from 2021. These were loans given to farmers and classified as priority sector lending loans. The bank has discontinued these two loan products," the company said.
The existing stock of loans will be classified into agricultural use, consumption use, or closed after review or when they are due for renewal. "The bank has been asked to maintain the standard asset provision on this stock of loans without changing customer terms till they get fully recovered or repaid," the management said.
The provision of INR 12.31 billion is around 5% of the underlying loan portfolio on a holistic basis and the loans are fully secured, the management said. "We are not expecting any significant increase in credit costs from previous years for the two discontinued loan products. The standard asset provision will get written back upon closure of these loans on Mar. 31, 2028," the management said.
Wednesday, Axis Bank reported an over 26% on-year fall in its net profit to INR 50.90 billion in the September quarter. Net interest income for the September quarter grew 1% sequentially and 2% on year. Net interest margin for the quarter stood at 3.73%.
The bank reported a gross non-performing assets ratio of 1.46%, down 11 basis points on quarter but up 2 bps on year. Net non-performing assets ratio fell 1 basis point sequentially to 0.44%. Axis Bank said that retail asset quality is stabilising. For the reporting quarter, net slippages in the retail business and net credit costs were lower on year.
Wednesday, shares of the bank closed 0.6% lower at INR 1,169.60 on the National Stock Exchange. The bank announced the results after market hours. End
Reported by Anand JC and Avishek Rakshit
Edited by Saji George Titus
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