Axis Bank Profit Nearly Doubles To Rs 4,125 Crore In June Quarter

Axis Bank on Monday reported a 86 per cent jump in its consolidated June quarter net at Rs 4,380.59 crore, helped by a steep fall in the amount set aside for bad loans.

On a standalone basis, the third largest private sector lender witnessed a 91 per cent increase in the net profit at Rs 4,125.26 crore.

Its core net interest income grew 21 per cent to Rs 9,384 crore on the back of a 14 per cent growth in advances and a 0.14 per cent expansion in the net interest margin at 3.60 per cent.

The overall non-interest income declined 11 per cent to Rs 2,999 crore, primarily driven by a Rs 667 crore reversal in treasury operations due to mark-to-market losses as the yields harden. The core fee income was up 34 per cent to Rs 3,576 crore.

The bank's provisions came down to Rs 359.36 crore as against Rs 3,302.30 crore in the year-ago period and Rs 987.23 crore for the preceding March quarter, helping the bottom line the most.

The provisions were down primarily due to a fall in loan loss provisions to Rs 777 crore as against Rs 2,865 crore in the year-ago period, and a write-back of Rs 418 crore in the other provisions (which include money set aside for restructured assets) as against a provision of Rs 437 crore in the year-ago period.

Fresh slippages stood at Rs 3,684 crore on a gross basis, and only 22 per cent of them came from the wholesale segment, which had been a pain point for the entire industry till a few years ago. 

Nearly three-fourths of the slippages came from the retail segment, and the bank hinted that they may be because of elevated stress from the agriculture segment which gets recognised in the first and third quarters of every fiscal.

The gross non-performing assets ratio improved to 2.76 per cent as against 3.85 per cent in the year-ago period, and 2.82 per cent at the end of March.

The loan growth at 14 per cent, which is at par with the industry, was driven by a loan growth of 25 per cent in retail and 74 per cent in small businesses. 

Bank's chief financial officer Puneet Sharma ducked the question on overall loan growth guidance but said it aims to grow faster than the industry.

Loans to large corporates declined by 5 per cent during the quarter, which is contrary to the numbers reported by its peers. The bank's deputy managing director Rajiv Anand said at this moment, the bank is averse to offer balance sheet support for corporate clients because it may not be profitable.

Anand said there is a "mispricing of liquidity" in some segments by competition which leads to concerns or doubts over profitability for the bank.

Its overall capital adequacy ratio stood at 17.83 per cent with the core capital buffers at 15.16 per cent as on June 30.

The bank's chief executive and managing director Amitabh Chaudhry said that it has sought the approval of the Competition Commission of India for its over Rs 12,000-crore deal to take over Citi India's retail business and expects the nod in the next 6-8 weeks.

He said the bank has the right to use the 'Citi' brand name for some time even after the deal -- which the bank expects to conclude by March -- is over and can use the same for holding on to the customers in the transition period.

An integration office and a committee to take the deal forward is already in place, and the bank is not overtly concerned on how the Citi business to be acquired is doing, Chaudhry said.

Among its subsidiaries, Axis Finance reported a 59 per cent jump in its net at Rs 95 crore for the reporting quarter. The asset management company saw a 20 per cent increase in its profits at Rs 88 crore. Axis Capital's net stood at Rs 34 crore while the same for Axis Securities came at Rs 39 crore.

The bank scrip closed 0.38 per cent down at Rs 728.20 a piece on the BSE on Monday, as against a 0.55 per cent correction on the benchmark.