Private sector lender Axis Bank continued to report lower bad loans even as it posted a net profit of ₹1,505 crore for the Jan-March period compared to a loss of ₹2,189 crore during the same period of the previous fiscal.

Gross and net bad loans fell for the fourth consecutive quarter, which resulted in provision figures dropping to a 12-quarter low.

The bank’s gross NPA ratio was at 5.26% at the end of March, compared to 6.77% the year earlier.

Overall provisioning at ₹2,711.43 crore was significantly lower than ₹7179.53 crore reported during the same period of the previous financial year. Provision coverage ratio improved to 77% from 75%, sequentially.

Slippages were at ₹3,012 crore during Q4FY19, compared to ₹3,746 crore in Q3FY19 and ₹16,536 crore in Q4FY18. Corporate lending slippages stood at ₹1,369 crore.

The bank’s net interest income (NII) grew 21% to ₹5,706 crore during Q4FY19 from ₹4,730 crore in Q4FY18, while net interest margin for the quarter was 3.44% as compared to 3.33%.

On the growth plans for the current financial year, Axis Bank’s CFO Jairam Sridharan said,

“The bank intends to have 500-700 bps higher domestic loan growth from where the market is likely to be. We believe net interest margins to be stable with a slightly upward bias.” During FY19, domestic loan growth was 18% with retail loans increasing by 19%, while domestic corporate loan growth was 17%. Retail loans now account for 50% of the total loan, up from 47% last year. Unsecured loans constituted 14% of the retail loan book, with personal loans at 9% and credit cards at 5%.

“Axis Bank’s execution strategy pivots on delivery of growth and profitability on a sustainable basis. The intention is to get back 18% return on equity,” said Amitabh Chaudhry, MD & CEO.

Return on equity in the fourth quarter was 10.3% and the bank aims to take it to 18% over the next three years.