Axis Bank is now at a crucial juncture in the race to challenge the dominance of HDFC and ICICI Bank in the Indian banking sector. Following the recently announced Q3 FY26 results and the successful integration of Citibank’s retail portfolio, the market is keenly watching Axis Bank to close the gap in profitability and market share.

The bank performed exceptionally well this quarter, reporting a net profit of ₹6,490 crore. While growth was 3 percent year-on-year, the 28 percent quarter-on-quarter increase in profits reflects the bank’s strong recovery.

New source of revenue from premium customers

For Axis Bank, 2026 is proving to be the year to fully capitalize on the benefits of the Citibank integration. The addition of premium and affluent customers from Citibank has not only led to a 20 percent growth in Axis Bank’s credit card portfolio but also a significant improvement in revenue per customer.

The bank aims to further increase its non-interest income by cross-selling wealth management and insurance products to these high-net-worth customers by the end of 2026. The bank’s wealth management business currently stands as one of India’s largest businesses with assets under management (AUM) of over ₹6.87 lakh crore, laying a strong foundation for future growth.

IT Spending and Digital Transformation

To compete with competitors, Axis Bank has placed a significant bet on modernizing its technological capabilities, investing over ₹3,000 crore annually in IT and digital infrastructure. The bank aims to migrate 70 percent of its data center infrastructure to the cloud to reduce operational costs and enhance digital agility, as 96 percent of the bank’s personal financial transactions are currently conducted digitally.

AI-based platforms like ‘Axis Click’ are now approving personal loans in less than 10 seconds, demonstrating the bank’s digital prowess and placing it on par with large private banks in terms of technology.

Financial Health and Asset Quality

The bank’s balance sheet strength is reflected in its asset quality, with gross NPAs improving to 1.40 percent and net NPAs falling to a low of 0.42 percent. The bank’s loan book has seen annual growth of 14 percent and deposits of 15 percent, both better than the industry average.

While the bank continues to face the challenge of increasing its net interest margin (NIM) from the current level of 3.64 per cent to 3.8 per cent, the management expects margins to improve in the coming quarters due to lower deposit costs.

About the Author