Axis Bank's net interest margin (NIM) shrunk sharply to 4.01% from 4.26% a year ago and 4.11% in the prior quarter. Last week, HDFC Bank and ICICI Bank – two of India's largest private lenders – also reported weak margins. Axis Bank reported a 9.4% year-on-year growth in net interest income – the difference between interest earned and paid out – to 125.32 billion rupees. Its gross non-performing asset ratio (NPA), a key measure of asset quality, improved to 1.58% as of December-end from 1.73% at the end of the prior three months.