Axis Bank vs Federal Bank Q4 FY26

AX

Axis Bank

Q4 FY26 · Banking

Axis Bank reported Q4 FY26 PAT of ₹7,711 crore, flat YoY, impacted by a one-time standard asset provision of ₹2,001 crore and a tax benefit of ₹2,193 crore. NII grew 5% YoY to ₹14,457 crore, while NIM contracted 29bps YoY to 3.62%. Loan growth was robust at 19% YoY, driven by wholesale (38% YoY) and retail disbursements (+24% YoY). Asset quality improved with GNPA at 1.23% (down 17bps QoQ) and net credit cost at 37bps (down 39bps QoQ). Management reiterated a through-cycle NIM target of 3.8% within 15-18 months of the last rate cut. The bank created a ₹2,001 crore buffer provision against West Asia risks. Key risk: prolonged geopolitical tensions could stress asset quality and credit costs.

Guidance read

Through-cycle NIM target of 3.8%: Management expects to achieve a through-cycle NIM of 3.8% within 15-18 months from the last rate cut transmission. Retail-commercial mix target of 70:30: The bank aims to maintain a retail and commercial banking advances mix of approximately 70% of total advances, plus/minus 3-4%. No equity capital requirement for growth: Management reiterated that the bank does not need equity capital for growth or protection; may issue Tier 2/AT1 instruments opportunistically.

Risk read

Key risks include West Asia geopolitical tensions — Prolonged conflict could disrupt supply chains, raise oil prices, and impact asset quality and credit costs.; Deposit pricing pressure — Analyst raised concern about rising wholesale deposit rates; management noted year-end uptick but expects some softening.; NIM compression from rate cuts — Full transmission of 25bps repo cut impacted NIM; further cuts could pressure margins despite repricing benefits..

Promise ledger

Scorecard data is being built as historical quarters are processed.

FE

Federal Bank

Q4 FY26 · Banking

Federal Bank delivered a record Q4 FY26 with net profit of ₹1,145 crore (up ~10% QoQ), driven by strong NII growth of 14.2% YoY and record fee income of ₹991 crore (+24% YoY). NIM expanded 2bps QoQ to 3.20%, supported by a 4bps decline in cost of funds to 5.46%. CASA ratio improved 87bps QoQ to 32.94%, with CASA balances crossing ₹1 lakh crore. Asset quality improved to decadal bests: GNPA 1.62%, NNPA 0.37%. ROA reached 1.24% (ex-one-offs), back to pre-rate-cut levels. Management guided for continued NIM expansion, 100 new branches in FY27, and maintained credit cost guidance of 50-60bps. Key risk: escalation of West Asia conflict impacting energy prices and remittance inflows.

Guidance read

NIM expansion to continue: Management expects further NIM improvement through deposit repricing, liability mix shift, and asset mix optimization. 100 new branches in FY27: Planned branch expansion of about 100 branches in the next fiscal year, supported by data-driven network strategy. Credit cost guidance maintained at 50-60 bps: Credit cost guidance remains unchanged at 50-60 basis points, though subject to review based on geopolitical clarity. CASA ratio target of 36%: Management reiterated the medium-term target of 36% CASA ratio, achievable given recent strong momentum.

Risk read

Key risks include West Asia conflict escalation — Geopolitical tensions could disrupt energy markets and remittance inflows, impacting deposit stability and asset quality.; Home loan pricing pressure — Intense competition in home loans with rates as low as 7.15% vs deposit costs above that, limiting growth in this segment.; ECL transition impact uncertainty — Management has not yet assessed the full impact of the new ECL guidelines, creating near-term provisioning uncertainty.; Potential job losses in Middle East — If the West Asia conflict leads to job losses and return of NRIs, remittance inflows and NR deposits could be affected..

Promise ledger

Scorecard data is being built as historical quarters are processed.