Which numbers matter most in a bank result?

Start with loan and deposit growth, CASA and funding mix, net interest margin, slippages, gross and net NPA, credit cost, capital adequacy and return on assets. Read them as a connected system rather than as an isolated scorecard.

Is a higher NIM always better for a bank?

No. A higher NIM can reflect a stronger deposit franchise, but it can also come from taking more credit risk or holding a different loan mix. The margin must be read beside funding costs, asset quality and growth.

Why is ROCE not normally used for banks?

Debt is an operating raw material for a bank rather than ordinary financing, so industrial capital-employed formulas are not economically comparable. Analysts usually focus on return on assets, return on equity and regulatory capital.

What does CASA tell an investor?

CASA is the share of deposits in current and savings accounts. It can indicate access to relatively low-cost funding, but the pricing and stability of the full deposit base matter more than the label alone.

How to Analyse Bank Results: NIM, CASA, Credit Costs and Asset Quality

To analyse a bank result, follow the chain from growth to funding, funding to margin, margin to credit cost, and credit cost to returns and capital. A headline profit number cannot tell you whether the bank grew safely, paid up for deposits, released provisions or genuinely improved its operating economics.

That chain is different from the one used for an industrial company. For a manufacturer, borrowings mainly finance the business. For a bank, deposits and other borrowings are inputs used to create earning assets. That is why a bank result should not be forced into an EBITDA and ROCE template. The same discipline appears in our guides to the Axis Bank business model and forecasting bank earnings.

1. Did loans grow, and what kind of loans grew?

Begin with gross advances, but immediately break the number into retail, corporate, small-business and unsecured books where disclosures permit. Two banks can report identical loan growth while changing their risk very differently.

Ask four questions:

Was growth faster or slower than system credit growth?
Which segments created the growth?
Did yields rise because of pricing or because the mix became riskier?
Did risk-weighted assets grow faster than reported advances?

A quarter of rapid unsecured growth deserves a different interpretation from a quarter driven by mortgages or highly rated corporate lending. Growth is not automatically good. It consumes funding, capital and future risk capacity.

2. Did deposits keep pace?

Loan growth has to be funded. Compare deposit growth with loan growth and watch the loan-to-deposit relationship over several quarters. When loans repeatedly grow faster than deposits, the bank may need wholesale funding or more expensive term deposits.

CASA is useful, but it is not a complete funding analysis. Current accounts are generally cheap, savings-account pricing can change, and term deposits often reprice with a lag. The important question is the blended and marginal cost of funds.

As an illustration, the latest comparable year-end bank KPI snapshot available in Altys for Axis Bank and Kotak Mahindra Bank was 31 March 2026. Axis reported a 40.0 per cent CASA ratio and 3.62 per cent NIM. Kotak reported 43.3 per cent CASA and 4.67 per cent NIM. These figures do not establish that one franchise is superior. They identify the next questions: differences in loan mix, funding costs, pricing and risk.

3. Build the net-interest-income bridge

The basic relationship is:

Net interest income = interest earned minus interest paid

Net interest margin, or NIM, relates net interest income to average earning assets. Its movement can come from asset yields, funding costs, liquidity, loan mix and the speed at which each side of the balance sheet reprices.

Do not write “NIM fell because deposit costs rose” unless the disclosures support that explanation. A useful bridge separates:

yield on advances;
yield on investments;
cost of deposits;
cost of total funds;
the mix of earning assets;
excess liquidity; and
one-time interest recoveries or reversals.

A 10-basis-point change is meaningful only in context. It could be a normal consequence of the rate cycle or evidence of deposit pressure.

4. Separate operating cost from credit cost

Bank expenses fall into two very different buckets. Operating expenses determine cost efficiency. Provisions absorb expected and realised credit losses.

Credit cost is generally expressed relative to average loans. A low reported credit cost can mean that underwriting is strong, but it can also reflect provision releases, recoveries or a benign point in the cycle. Check slippages, upgrades, recoveries and write-offs before treating the number as sustainable.

At 31 March 2026, the Altys bank KPI snapshot showed gross and net NPA of 1.23 and 0.37 per cent for Axis Bank, and 1.20 and 0.25 per cent for Kotak. Reported credit costs were 0.37 and 0.39 per cent respectively. The numbers are close, but their movement, composition and provision buffers matter more than a one-date ranking.

5. Read asset quality as a flow, not only a stock

Gross NPA and net NPA are balance-sheet stocks. A quarterly result is also about flows into and out of stress.

Track:

gross slippages;
slippage ratio;
upgrades and recoveries;
write-offs;
restructured or stressed exposures;
provision coverage; and
stress in individual loan segments.

A flat NPA ratio can conceal heavy write-offs. Conversely, an increase can follow conservative recognition rather than a sudden deterioration. The reconciliation is more informative than the ending percentage.

6. End with ROA, ROE and capital

Return on assets is a compact measure of how efficiently a bank converts its balance sheet into profit. Return on equity then reflects ROA and financial leverage. Neither should be read without capital adequacy.

At March 2026, Altys recorded capital adequacy of 16.42 per cent and CET1 of 14.38 per cent for Axis, compared with 22.40 and 21.30 per cent for Kotak. A larger buffer can support growth and resilience, but excess capital can also depress near-term ROE. The analytical question is what management can earn on incremental capital without weakening risk standards.

A repeatable bank-results checklist

After each result, record the same fields in the same order:

Loan growth by segment.
Deposit growth and mix.
Loan-to-deposit movement.
NII and NIM bridge.
Fee income and treasury contribution.
Operating expenses and cost efficiency.
Slippages, recoveries, write-offs and provisions.
GNPA, NNPA and provision coverage.
ROA, ROE, CET1 and capital adequacy.
Guidance changes and unresolved questions.

Altys connects these reported series with source-linked filings, guidance history and monitoring. The value is not an automatically generated verdict. It is the ability to preserve the same bank-specific questions across quarters and see when one of the relationships changes.

Data note: Altys metrics snapshot as available on 13 September 2026. Bank KPIs are reported in percentage units. The cited Axis Bank and Kotak Mahindra Bank observations refer to the year ended 31 March 2026 and were available from their respective reported disclosures. Figures are educational and are not a recommendation.