Axis Bank Q4 Results: Flat Profit Despite 6% NII Growth, NIM Shows YoY Decline
India's fourth-largest private sector lender by market capitalization, Axis Bank, released its financial results for the quarter ending March 2025, revealing a marginal decline in profits despite growth in interest income. The bank continues to maintain strong asset quality metrics while expanding its loan book across key segments.
Key Financial Highlights
In its Q4FY25 results announced on April 24, Axis Bank reported a standalone net profit of ₹7,117.50 crore, marking a slight 0.20% year-on-year (YoY) decrease compared to ₹7,129.67 crore in the same quarter of the previous fiscal year.
The bank's total interest earned showed robust growth, increasing by 6.90% YoY to reach ₹31,242.51 crore compared to ₹29,224.54 crore in the corresponding quarter last year. This growth in interest income demonstrates the bank's continued focus on expanding its core lending operations.
Net Interest Income and Margin Performance
Axis Bank's net interest income (NII) grew by 6% YoY to ₹13,811 crore, reflecting the bank's ability to generate higher interest from its lending activities despite challenging market conditions.
However, the net interest margin (NIM) for Q4FY25 stood at 3.97%, showing a decline of nine basis points compared to 4.06% in the year-ago period. This contraction in margin indicates increased pressure on the bank's lending spreads in a competitive environment.
Operating Performance
The bank reported an operating profit of ₹10,752 crore for the quarter, representing a modest 2% YoY increase. Operating costs grew at a rate of 6% YoY during Q4FY25, suggesting the bank continued to invest in its business infrastructure and operations.
Provisions and contingencies for the quarter stood at ₹1,359 crore, while specific loan loss provisions amounted to ₹1,369 crore. The bank maintained a prudent approach to risk management with cumulative provisions (standard + additional, other than NPA) of ₹11,957 crore at the end of Q4FY25.
Balance Sheet Growth
Axis Bank's balance sheet grew by 9% YoY to reach ₹16,09,930 crore as of March 31, 2025. Total deposits showed strong momentum, growing by 7% quarter-on-quarter (QoQ) and 10% YoY on a month-end basis.
The share of CASA (current account savings account) deposits in total deposits improved significantly to 41% from 39% at the end of Q3FY25, indicating the bank's success in attracting low-cost deposits.
Loan Book Expansion
The bank's advances grew by 3% QoQ and 8% YoY to reach ₹10,40,811 crore as of March 31, 2025. Retail loans, which accounted for 60% of the net advances, grew by 3% QoQ and 7% YoY to ₹6,22,897 crore.
The composition of the retail loan book showed:
- Secured retail loans constituted approximately 72% of the retail book
- Home loans comprised 27% of the retail book, growing by 1% YoY
- Personal loans saw an 8% YoY growth
- Credit card advances increased by 4% YoY
The SME book demonstrated strong performance, growing by 14% YoY and 4% QoQ to reach ₹1,18,521 crore, while the corporate loan book registered an 8% YoY growth.
Asset Quality Improvements
Axis Bank maintained robust asset quality metrics, with gross NPA and net NPA levels at 1.28% and 0.33% respectively as of March 31, 2025, showing improvement from 1.46% and 0.35% as of December 31, 2024.
Gross slippages during the quarter amounted to ₹4,805 crore, lower than the ₹5,432 crore reported in Q3FY25 but higher than the ₹3,471 crore in Q4FY24.
The bank's provision coverage ratio, as a proportion of gross NPAs, stood at 75% as of March 31, 2025, compared to 76% as of December 31, 2024, and 79% as of March 31, 2024.
Dividend Announcement
The board of directors has recommended a dividend of ₹1 per equity share with a face value of ₹2 per equity share for FY25, subject to shareholders' approval at the upcoming annual general meeting.
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