Axis net up 54% in Q4 as provisions decline
Premium- The bank’s total provisions and contingencies stood at ₹984.12 crore
MUMBAI : Private sector lender Axis Bank on Thursday reported a 54% year-on-year (y-o-y) rise in its net profit to ₹4,118 crore in the March quarter of FY22 on the back of higher income and lower provisions.
The bank’s total provisions and contingencies stood at ₹984.12 crore, down 55% y-o-y.
Axis Bank’s net interest income (NII), which is the difference between interest earned and interest expended, increased 17% y-o-y to ₹8,819 crore and its net interest margin (NIM), a key measure of profitability, stood at 3.49%, down 4 basis points (bps) sequentially. Axis Bank’s other income, which includes fee, trading profit, and miscellaneous income, grew 19% y-o-y to ₹4,223 crore in the three months to March. One basis point is 0.01%.
“There is a strong momentum going into FY23. There is a positive cultural change in the bank. We are confident and optimistic about the future," said Amitabh Chaudhry, managing director and chief executive officer, Axis Bank.
The bank’s gross non-performing assets (NPAs) ratio, bad loans as a percentage of gross advances, was 2.82% in Q3FY22, down 35 bps sequentially. Post-provisions, the net NPA ratio was 0.73% in Q4, against 0.91% in the December quarter of FY22.
“About 54% of the slippages are upgraded in the same quarter. Nearly 34% of fresh slippages is from wholesale business and the rest from retail business. Our net slippage is ₹218 crore. We are comfortable with where our asset quality mix stands at present," said Puneet Sharma, chief financial officer, Axis Bank.
The bank’s gross slippages in Q4FY22 were ₹3,981 crore, compared with ₹4,147 crore during Q3 and ₹5,285 crore in Q3FY21. Slippages from the loan book were ₹3,332 crore and those from investment exposures were ₹815 crore. The bank’s recoveries and upgrades from NPAs during the quarter were ₹3,763 crore, while write-offs were ₹1,696 crore.
Axis Bank’s advances grew 15% y-o-y to ₹7.07 trillion as on 31 March. Retail loans grew 21% y-o-y to ₹3.99 trillion and accounted for 57% of the net advances of the bank. The share of secured retail loans was 80%, with home loans constituting 36% of the retail book. The bank’s corporate loan book grew 4% y-o-y to ₹2.30 trillion.
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The private sector lender said that it added 2.67 million new credit cards in FY22, its highest-ever card addition. The new card guidelines issued by the Reserve Bank of India will immediately impact the number of outstanding cards at Axis Bank, said Sanjeev Moghe, executive vice president and head of cards and payments. “There are business cycles and there are regulatory cycles in the businesses. We believe the business will bounce back from these guidelines. We do not see any impact on our co-branded card partnerships because of the new guidelines," Moghe said.
On Thursday, shares of the bank rose 1.8% to close at ₹779.95 on the BSE.
On 30 March, Axis Bank announced the acquisition of the Indian consumer business of Citibank for ₹12,325 crore ($1.6 billion). Once completed, the deal will strengthen Axis Bank’s status as the country’s third-largest private lender and help it compete with larger rivals HDFC Bank and ICICI Bank in lucrative segments.