Private sector major Axis Bank on Thursday reported 4 per cent year-on-year (y-o-y) growth in its net profit for the quarter ended December at ₹6,304 crore, led by stable core income growth. However, on a quarter-on-quarter (q-o-q) basis, the bottomline was down 9 per cent due to lower growth in other income.

During the reporting quarter, the bank’s net advances and deposits grew 9 per cent each y-o-y to ₹10.14 lakh crore and ₹10.95 lakh crore, respectively.Net interest income, the difference between interest earned and expended, also grew proportionately by 9 per cent to ₹13,606 crore. Other income, meanwhile, moderated to ₹5,972 crore in Q3FY25 from ₹6,722 crore a quarter ago. Net interest margin (NIM), a key indicator of banks’ profitability, moderated by 6 bps sequentially to 3.93 per cent in Q3.

Asset quality

Axis Bank’s asset quality deteriorated slightly, with gross non-performing asset (GNPA) ratio rising by 2 bps q-o-q to 1.46 per cent and net NPA rising by 1 bps sequentially to 0.35 per cent as on December 31.Gross slippage ratio rose to 2.13 per cent from 1.78 per cent in last quarter, while credit cost rose to 1.28 per cent from 0.90 per cent a quarter ago.

In absolute terms, fresh slippages or new bad loans amounted to ₹5,432 crore in Q3 as against ₹4,443 crore last quarter. Over ₹4,900 crore of fresh slippages emanated from the retail portfolio itself, especially from unsecured personal loans and agriculture loans.

The bank does not provide data on stressed accounts classified as special mention accounts.

“It is difficult to predict where we are in the cycle (asset quality cycle) at this point in time, largely because the external macros are very dynamic,” said Subrat Mohanty, ED at Axis Bank.

“...Liquidity continues to remain tight, global macros, especially geo-political risks continue to be somewhat undefined presently and hopefully in next 30-45 days you will get better clarity. India’s growth has also been a bit tepid last quarter so it is difficult to say when do we see this coming back to normal. We monitor our portfolio closely and take action based on that...,” he said.