Axis Bank on Monday reported a 3% year-on-year (YoY) increase in net profit to ₹6,489.6 crore for the December quarter, supported by steady operating performance despite elevated costs and provisioning. The country’s fourth-largest private sector lender by market capitalisation had posted a profit of ₹6,304 crore in the corresponding quarter of the previous year, the bank said in an exchange filing.

Net interest income (NII) rose 5% YoY to ₹14,286.4 crore, compared with ₹13,606 crore a year earlier, driven by balance-sheet growth and stable yields. Net interest margin (NIM) for the quarter stood at 3.64%.

Non-interest income grew 4% YoY to ₹6,226 crore, led by a strong performance in fee income, which increased 12% YoY to ₹6,100 crore, supported by robust traction in retail banking. Retail fees accounted for 71% of the bank’s total fee income during the quarter.

The bank’s operating profit stood at ₹10,876 crore, up 3% YoY, while core operating profit rose 7% YoY to ₹10,815 crore, reflecting growth in core income streams.

“Our progress this quarter reflects our focus on creating solutions that matter—simplifying access to credit, reimagining digital banking, and investing in talent and ideas that will shape the future. We will continue strengthening our competitive edge by modernising platforms, empowering teams, and staying ahead of shifts in customer behaviour through smart and innovative solutions,” said Amitabh Chaudhry, MD & CEO, Axis Bank.

Asset quality improves

On the asset quality front, gross non-performing assets (NPAs) declined to 1.40% of advances in Q3 FY26, from 1.46% in the corresponding quarter last year. Net NPAs also eased to 0.42%, compared with 0.35% on a YoY basis.

Gross slippages during the quarter stood at ₹6,007 crore, compared with ₹5,696 crore in Q2 FY26 and ₹5,432 crore in Q3 FY25. Recoveries and upgrades from NPAs amounted to ₹2,872 crore, while the bank wrote off NPAs aggregating ₹3,275 crore during the quarter.

Provisions and contingencies for the quarter stood at ₹2,246 crore, while specific loan loss provisions amounted to ₹2,307 crore. On an aggregate basis, the bank’s provision coverage ratio (PCR)—including specific, standard and additional provisions—stood at 146% of gross NPAs as of December-end.

The bank’s advances grew 14% YoY and 4% quarter-on-quarter (QoQ) to ₹11,59,052 crore as of December 31, 2025. Retail loans rose 6% YoY to ₹6,44,575 crore, accounting for 56% of net advances. Secured retail loans constituted around 73% of the retail portfolio, with home loans comprising 26%.

Small Business Banking (SBB) advances grew 2% QoQ and 14% YoY. Loans against property expanded 20% YoY, personal loans rose 2% QoQ and 5% YoY, credit card advances increased 3% YoY, and the rural loan portfolio grew 2% QoQ.

The SME book, which remains well diversified across geographies and sectors, expanded 6% QoQ and 22% YoY to ₹1,39,327 crore. The corporate loan book grew 7% QoQ and 27% YoY, with the domestic corporate portfolio up 28% YoY. The mid-corporate segment recorded 31% YoY growth and 6% QoQ expansion.

As of December 31, 2025, the book value of the bank’s investment portfolio stood at ₹4,18,429 crore, with ₹3,51,352 crore invested in government securities. Investments in corporate bonds amounted to ₹48,355 crore, while ₹18,722 crore was deployed in other securities, including equities and mutual funds.

Ahead of the Q3 results, shares of Axis Bank closed at ₹1,260.10, down 2.7%, with a market capitalisation of ₹3.91 lakh crore.