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Informist, Saturday, Jul. 18, 2026

 

--Axis Bank: Bond yields may soften further from FCNR(B) deposits 
--Axis Bank: Believe reached cycle bottom as far as NIM concerned 
--Axis Bank: Watchful of evolving uncertainties, including El Nino impact 
--CONTEXT: Axis Bank's management speaking at post-earnings press conference 
--Axis Bank: See strong interest for FCNR(B) from NRI customers

 

MUMBAI/NEW DELHI – Axis Bank's management believes that the net interest margin of 3.46% is the 'cycle bottom' and it will improve going forward. "We believe this is the cycle bottom as far as net interest margin is concerned. We are hopeful that from here on, you will see the NIMS journey moving in the right direction," Managing Director and Chief Executive Officer Amitabh Chaudhry said in a post-earnings press conference call.

 

In the June quarter, the bank experienced pressure on its margins, with overall net interest margin falling to 3.46%, 34 basis points lower than a year ago and 16 bps lower on quarter. Earlier in the day, the bank beat the Street's estimates by reporting 22.5% growth in net profit at INR 71.14 billion.

 

Chaudhry said the situation would improve further after the bank raises money overseas through foreign currency non-resident bank deposits. "FCNR(B) deposits give us an opportunity which could be large and very different in terms of huge amount of liquidity that could come into the system and it could provide growth opportunities or give us the opportunity to pay some liabilities. Depending on how much we are able to raise, we will decide our strategy accordingly in terms of how we deploy that additional liquidity which was not planned for when we started the financial year," he said.

 

The bank, however, did not disclose the quantum of funds mobilised so far through FCNR(B) deposits. The lender will disclose the figure after September quarter, senior executives of the bank said.

 

Chaudhry said "FCNR(B) deposit is extracting strong interest from non-resident Indian customers and we see it as a meaningful opportunity to augment our deposit base through our NRI franchise and our proactive outreach to banks across overseas markets." The bank also expects yields on government securities to soften further because of FCNR(B) deposits flowing in. "Bond yields have come down by approximately 30 bps from their highs. Going forward, there could be some further softening bias as the FCNR(B) flows come in and some of the banks will probably end up investing this money in government bonds, particularly the foreign banks," the bank's management said.

 

The private sector lender expects credit growth to be around 12% for the industry in the medium term. "We believe that over the medium term, we can grow at 300 bps faster than industry," the bank's management said. Chaudhry added that the bank remains watchful of evolving opportunities, including the potential implications of El Nino on the macroeconomy. The bank registered strong loan book growth during the June quarter, with advances growing 19% on year and 2% on quarter to INR 12.61 trillion as on Jun. 30. On Friday, shares of the bank closed at INR 1,328.50 on the National Stock Exchange, up 1.6% from Thursday's close.  End

 

Reported by Sagar Sen and Nandini Sinha

Edited by Avishek Dutta

 

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