Axis Bank Q1 Results: Net Profit Nearly Doubles As Provisions Dip

Axis Bank Ltd. saw its quarterly net profit surge on higher core income and lower provisions.

Net profit for the private lender rose 91% year-on-year to Rs 4,125 crore in the quarter ended June, according to its exchange filing. That compares with the Rs 3,658-crore consensus estimate of analysts tracked by Bloomberg.

Net interest income for the quarter stood at Rs 9,384 crore, up 21% year-on-year. Other income fell 10.6% at Rs 2,999 crore.

Asset quality for Axis Bank improved during the period. Its gross non-performing asset ratio stood at 2.76%, down from 2.82% as on March 31. Net NPA ratio fell 9 basis points sequentially to 0.64%.

The bank reported fresh slippages worth Rs 3,684 crore during the first quarter, compared with Rs 3,981 crore in January-March. Upgrades and recoveries stood at Rs 2,957 crore, while write-offs were at Rs 1,512 crore.

Provisions for the quarter fell 89% year-on-year at Rs 359.36 crore.

Axis Bank's net advances stood at over Rs 7 lakh crore, up 14% year-on-year. According to Amitabh Chaudhry, managing director and chief executive officer, Axis Bank has pushed up growth trajectory across business segments and will look to continue this momentum . The lender will grow faster than the industry average, he said.

While retail and small and medium enterprises rose 25% and 27%, respectively, corporate loans fell 5% from a year ago. Retail loans now constituted 59% of the total loan book.

"At the shorter end of the curve, the competition is somewhere mispricing the liquidity. We will grow in our focus areas such as retail, mid-corporates, SME," said Rajiv Anand, deputy managing director, Axis Bank.

Total deposits rose 13% year-on-year at over Rs 8 lakh crore. Current account-savings account deposits rose 16%, and constituted 43% of the deposit book.

About the plan to acquire Citi's India retail banking business, Chaudhry said a transition team at Axis Bank is already in place. "We will engage with Citi more extensively once we receive CCI (Competition Commission of India) approval in six to eight weeks."

Shares of Axis Bank closed 0.56% down before the results were announced compared with a 0.53% decline in the benchmark Nifty 50.