Axis Bank conducted a conference call on 18 July 2026 to discuss the financial results for the quarter ended June 2026. Amitabh Chaudhry, MD & CEO of the bank addressed the call:

Highlights:

The bank expects the cost-to-assets should continue trending lower over the next 18 to 24 months, driven by continued gains from technology, AI and productivity improvements.

The bank continues to experience solid growth, gaining market share in both advances and deposits, achieving a 19% yoy and 2% qoq growth in total advances.

Wholesale advances saw significant growth at 38% yoy, while small and medium enterprises (SME) grew by 25% and retail by 8%.

Retail disbursements remain positive due to a focus on quality customer sourcing, stringent underwriting practices, and effective multi-channel distribution strategies.

The SME sector benefits from enhanced digital and analytical capabilities, which support scale, expedite credit decisions, and improve customer experience.

Wholesale banking growth is broad-based, fueled by strong transaction flows and relationship-driven strategies, allowing the bank to expand its engagement with mid-corporate and conglomerates.

Deposits also show robust growth, exceeding industry growth rising 18% yoy, with term deposits gaining 21%, current accounts 13%, and savings accounts by 14%. Sequentially, total deposits grew by 6%, with CASA up by 5% and term deposits by 7%.

The FCNR (B) deposit product is attracting significant interest from NRI customers, offering an opportunity for deposit growth through targeted outreach in global markets.

The bank''s cost of funds declined by 35 bps yoy and 2 bps qoq, with improved deposit diversification strengthening its funding base.

The New-to-Bank initiative shows strong growth, with an 18% yoy rise in average balances, aided by a 30% increase in corporate salary account balances.

Burgundy, a premium banking segment, recorded a 20% yoy growth in assets under management (AUM), contributing to the bank''s premiumization strategy.

Profitability efforts focus on creating a sustainable earnings profile through disciplined execution and operational efficiency, resulting in a net interest margin (NIM) of 3.46% for Q1FY27.

The cost to assets declined to 2.20%, and the bank''s consolidated return on assets (ROA) was 1.56% with a return on equity (ROE) of 14.52% in Q1FY27.

Axis Bank prioritizes quality, balance sheet resilience, and technological advancements.

The GNPA ratio is at 1.28%, with a NNPA ratio of 0.39%, indicating improvement in asset quality.

The bank successfully raised $600 million in Additional Tier 1 capital and $300 million in senior debt, enhancing its financial standing. These transactions attract high-quality long-term investors and bolster the bank''s credit position.

Monitoring macroeconomic uncertainties, including El Nino impacts, Axis Bank remains confident in its franchise''s strength and resilience.

With a robust balance sheet, disciplined risk management, and a diversified growth model, the bank is poised to leverage opportunities and achieve sustainable growth that outstrips industry averages.

Fees amounted to Rs 6,156 crore, reflecting a 7% yoy growth, with granular fees constituting 90% of total fees.

The cost-to-assets ratio improved to 2.20%, decreasing by 21 bps yoy and 8 bps qoq.

Net credit costs stood at 0.63%, down 75 bps yoy.

PCR remained robust at 70% with standard asset coverage improving to 1.24%, an increase of 12 bps yoy. Total provisions against GNPA ratio improved to 161%.

Annualized consolidated ROA was 1.56%, and annualized ROE stood at 14.52%, with subsidiaries contributing 5 bps to ROA and 36 bps to ROE in Q1FY27.

The CET-1 ratio, including Q1FY27 profit, is at 14.64%, netting an addition of 26 bps during the quarter.

The bank has indicated no need of equity capital for growth.

The bank holds Rs 8244 crore in total provisions, which includes standard asset provisions generated in Q2FY26 and provides an additional capital buffer of 52 bps over reported capital ratios. This evidence underscores the strength of the Bank''s balance sheet while continuing to facilitate growth and shareholder value without requiring equity capital for either growth or protective measures.

NIM for Q1FY27 at 3.46%, eased 34 bps yoy and 16 bps qoq. This yoy NIM decline can be attributed to the full impact of a 125 bps repo rate cut, coupled with shifts in the balance sheet mix.

The yoy NII growth of 8% is contrasted with a 19% growth in advances, influenced similarly by rate changes and balance sheet adjustments.

The qoq NIM decline was attributed to seasonal interest reversals and balance sheet repositioning. Cost of funds decreased by 35 bps yoy and 2 bps qoq

Low-yield RIDF bonds substantially reduced by Rs 5725 crore yoy to 0.41% of total assets from 0.84% last year.

The bank maintained its structural net interest margin target at 3.8% which is likely to be achieved over a period of 12-15 months. The margins have marked the bottom in Q1FY27.

The bank also maintained its medium-term growth guidance of industry plus 300 bps growth.

Fee to assets was recorded at 1.30%, with total wholesale fees rising 18% yoy.

The increase in operating expenses is predominantly driven by volume, technology, and business-as-usual expenses, while staff costs decreased by 6% yoy.

The qoq operating expense decline of Rs 744 crore arose from one-time items in staff costs and overall reduced statutory and volume-linked expenses.

Technology and digital investments represented 11% of total operating costs.

In loan and liability growth, market shares increased by 10 bps in loans and 20 bps in deposits on a yoy basis.

The loan book comprises 54% retail, 34% corporate, and 12% CBG, with around 74% of loans on floating rates.

Retail disbursement growth was 18% yoy, with notable increases in various sectors, including home loans (24%) and vehicle loans (21%).

Regarding asset quality, gross slippages amounted to Rs 5,566 crore, dominated by retail at Rs 5,176 crore.

The gross slippage ratio improved, with accompanying reductions to both net slippages and net slippage ratios.

Recoveries from written-off accounts increased to Rs 961 crore, up 6% yoy.

Total net slippage, adjusted for recoveries, was Rs 2,479 crore, indicating continued vigilance in maintaining asset quality.

The bank is closely monitoring macroeconomic trends, ensuring a resilient operation amidst evolving conditions while striving for growth.