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Informist, Wednesday, Oct. 15, 2025

 

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---Axis Bank: RBI's policy announcements positive for banking sector 
---CONTEXT: Comments by Axis Bank's mgmt in post-earnings analyst concall 
---Axis Bank: Too early to offer impact assessment of RBI's steps on bank 
---Axis Bank: Expect margins bottoming in Q3 if RBI doesn't cut rates more 
---Axis Bank: See stabilisation, improvement in unsecured loan sector ahead 
 

 

By Shubham Rana and Gopika Balasubramanium

 

MUMBAI/NEW DELHI – Axis Bank expects margins to bottom out in the December quarter, provided the Reserve Bank of India's Monetary Policy Committee does not lower interest rates further, the lender's management said Wednesday. 

 

"Q3 is when we should expect the bottoming of margins. But that response is subject to no further rate cuts," Puneet Sharma, chief financial officer, Axis Bank, said. "As you're aware, there is chatter around the rate cut itself. But as we stand, Q3 should be bottoming of margins for us." Sharma said in a conference call with analysts after the release of September quarter financial results. If there is a rate cut, Sharma said, there will be a reset to the projection.

 

Axis Bank Wednesday reported a 26% on-year fall in its net profit to INR 50.90 billion in the September quarter mainly because of a rise in provisions. The bank's net interest margin fell to 3.73% in the September quarter, down from 3.80% a quarter ago and 3.99% a year ago. Since the March quarter, Axis Bank's net interest margin has declined 24 basis points after factoring in the 100 bps of repo rate cut by the RBI's MPC between February and March.

 

Axis remains an outlier in assessing the impact of the interest rate cuts on the net interest margin. While most banks have said they expect the margins to bottom out in the September quarter, Axis sees it falling to its lowest in the December quarter. This, Sharma said, is because of the bank's assessment of the duration of its assets and liabilities.  

 

The bank's management said it is seeing stabilisation and improvement across the unsecured segment, in all three products--personal loans, credit card and microfinance loans. "Specifically, we have seen improvement in credit cards and stabilisation in personal loans and microfinance," the management said. This improvement has been happening over the last six to seven quarters and there is no reason why this can't continue, the management said.

 

The management said the RBI's recently announced regulatory steps on credit risk and expected credit loss norms are a positive for the banking system. The management, however, said it is too early to offer an impact assessment of RBI's steps on the bank.  End

 

Edited by Deepshikha Bhardwaj

 

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