Axis Bank , India's fourth-largest private lender by market value, posted an unexpected drop in first-quarter profit on Thursday as its bad loans surged after a one-time industry benchmarking exercise.

In Q1FY26, the bank reported fresh slippages of ₹8,200 crore, up 71 per cent Y-o-Y and sequentially. Of this, ₹7,500 crore is from the retail segment.

Axis Bank reported a 4% YoY decline in Q1FY26 net profit to ₹5,806 crore, driven by a sharp rise in provisions linked to a regulatory-triggered overhaul of its asset classification norms. The Reserve Bank of India had flagged lenient stress recognition practices,