Axis Bank's stress in its personal loan portfolio is likely to linger into FY26, with stabilisation not anticipated until at least Q2, according to Managing Director and CEO Amitabh Chaudhary during the bank’s recent earnings call.
While there are indications of a broader normalisation of stress in the retail credit cycle, a trend the bank first highlighted in 2022, personal loans remain a challenge, requiring a few more quarters to show improvement, according to Chaudhry.
On the growth front, Puneet Sharma, CFO, said, FY25 deposit and loan growth slightly underperformed the market, particularly compared to the top five banks.
For FY26, Sharma said he anticipates driving both growth and profitability.
On the retail credit front, Chaudhry said, while credit card slippages are stabilising, corporate and SME portfolios remain positive, and stricter loan classification rules and seasonal factors are likely to elevate credit costs in Q1 FY26.
He added, credit costs are projected to stay within the bank’s 15-year averages, supported by 15-20 percent higher provisioning coverage.
When asked if the bank’s stronger asset quality and earnings would lead it to take on riskier, high-yield retail loans to offset potential net interest margin (NIM) pressures in FY26, Chaudhary said, "We have established our risk guardrails, and we remain confident in pursuing whatever opportunities available while staying true to our approach."
Axis Bank on April 24 reported a 0.20 percent year-on-year decline in its standalone net profit to Rs 7,117.50 crore for the March quarter (Q4) of the last financial year (FY25). In the same quarter last year, the company's profit stood at Rs 7,129.67 crore.
Total interest earned during the quarter rose 6.90 percent year-on-year to Rs 31,242.51 crore from Rs 29,224.54 crore in the corresponding quarter of the previous financial year.
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