Axis Bank Faces Profit Dip Due to Regulatory Recalibration

MUMBAI: Axis Bank's financial performance saw a 4% year-on-year decrease in net profit, amounting to Rs 5,806 crore for the quarter ending June 2025. This decline was primarily attributed to increased provisions resulting from a one-off accounting adjustment, described by the bank as a 'technical impact' for internal bad loan classification recalibration.

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Impact of Stricter Bad Loan Policies

The adjustment affected cash credit, overdraft products, and one-time settled accounts, leading to Rs 2,709 crore in fresh slippages and an additional Rs 821 crore in provisions. Excluding this adjustment, total provisions would have stood at Rs 3,127 crore instead of Rs 3,948 crore. The bank emphasized that this adjustment reflects a 'prudential application' of regulatory guidelines rather than a genuine deterioration in asset quality.

Changes in Non-Performing Assets

As a result of the revised policy, gross non-performing assets increased by 29 basis points quarter-on-quarter to 1.57%, with net NPAs rising by 12 basis points to 0.45%. Despite the headline profit being impacted by these technical adjustments, the bank noted underlying growth in revenue, loan book, and fee income, presenting a more balanced financial picture.