Axis Bank shares tumble 4% to 1-month low after Citi Research flags delayed NIM recovery

Axis Bank shares are in the spotlight today, falling over 4.1% intraday on NSE after Citi Research released its latest report on the private lender.

As of 11:30 am, Axis Bank shares are trading around ₹1,235 apiece, down 3.7% with a day low of ₹1,231 per share and a day high of ₹1,277.6 apiece. This fall comes after Citi Research's latest report said Axis Bank’s net interest margin (NIM) recovery could take longer than previous management guidance and could be delayed to Q4FY26 or Q1FY27, instead of earlier guidance Q3FY26.

As a result, Axis Bank stock saw a sharp decline today and was among the top NIFTY50 losers and also dragged down the NIFTY Bank index, which is down nearly 1% as 10 out of the 12 constituents of NIFTY Bank are trading in the red.

What is net interest margin (NIM)?

Net interest margin (NIM) is one of the key profitability metrics for the banking industry, which measures the core lending profitability of the bank. In simple terms, NIM is the difference between what a bank earns from loans, mortgages, and investments and what it pays on deposits and other liabilities.

For example, if Axis Bank earns 9% interest on average from home loans and other forms of lending but pays 4% interest overall on savings and fixed deposits, then the difference of 5% is broadly considered to be its NIM. A higher NIM impacts positively on the overall profitability of the bank and indicates better performance overall. NIM is impacted by RBI repo rate changes, high competition for deposits, and other factors.

As a result, NIM is a very important metric as overall bank profitability depends on how the NIM perform during the particular quarter. In Q2FY26, Axis Bank’s NIM stood at 3.73% which the management plans to increase to 3.8% over the next 15-18 months.

Citi Research also mentioned in its report that Axis Bank’s corporate lending is showing improved traction, while the retail segment is recovering, being fueled by pent-up demand. Meanwhile, stress in the credit card portfolio is easing, while growth in the personal loan lending is stabilising.