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Informist, Monday, Jan. 26, 2026

 

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--Axis Bank: Some work still needs to be done on improving deposit quality
--CONTEXT: Axis Bank management's comments in post-earnings analyst concall

--Axis Bank: May raise funds via bonds if market conditions favourable
--Axis Bank: Hold provision of INR 4.34 bln towards new labour codes
--Axis Bank: NIM guidance of 3.8% agnostic to rate cycle
--Axis Bank: Deposit growth to stabilise in line with credit growth in 15-18 mos 

 

By Pratiksha and Kabir Sharma

 

MUMBAI/NEW DELHI – While progress on the cost and growth dimensions of deposits has been strong, work remains to be done on improving the quality, Axis Bank's senior management told analysts in a post-earnings conference call Monday. "...at the start of this fiscal, we had recalibrated our approach to both new-to-bank and existing-to-bank deposit mobilisation with a sharper focus on quality and engagement," it said. "The outcomes continue to be encouraging."

 

Axis Bank reported a net profit of INR 64.9 billion for the December quarter, up 3% on year. The private-sector bank's net deposits grew 15% on year to INR 12.61 trillion as of Dec. 31 and advances rose 14% on year to INR 11.59 trillion. "I'm hoping that in the next 15-18 months, the deposit growth will stabilise at similar levels as credit growth...," a top executive of the bank said.

 

The management remains confident of adhering to its net interest margin target of 3.8% going ahead. It said the guidance is not dependent on the rate-cut cycle. "(Net interest margin guidance of) 3.8%, we remain confident of," it said. "It is rate cycle-agnostic, which is why we say it is 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 (since February 2025). So, we remain confident that we will get to the 3.8% over the duration of reprice of our assets and liabilities."

 

The bank's net interest margin slipped to 3.64% in the December quarter from 3.93% a year ago. It is also down 9 bps on quarter, primarily due to the Reserve Bank of India's Monetary Policy Committee's cumulative rate cuts of 125 bps in 2025. "Full quarter impact of the 25 bps repo rate cut in December will play through loan yields in Jan-Mar FY26," the Axis Bank management said.

 

Further, the lender will consider opportunistically raising funds through Tier II and Additional Tier-I instruments based on market conditions, the management said. "The bank assesses its capital position on two pillars, i.e. growth and protection. We reiterate we do not need any equity capital for either pillar," it said.

 

The private-sector bank said it had allocated provisions worth INR 4.34 billion towards implementation of the new central labour codes, which have expanded the definition of wages and mandated higher payouts for benefits such as gratuity and leave encashment. The bank's total provisions were at INR 22.46 billion in Oct-Dec, up 4% on year but down nearly 37% from the September quarter. Axis Bank's shares ended 2.8% lower Friday at INR 1,258 on the National Stock Exchange. The equity markets were shut Monday for Republic Day.  End

 

Edited by Rajeev Pai

 

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