Axis Bank Q3 Review - Growth, Margins Better Than Expectations: Dolat Capital
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Dolat Capital Report
Axis Bank Ltd. reported a good set of numbers with 14 basis points QoQ expansion net interest margin, lower than expected provisions, better than expected loan growth at 7% QoQ, and improving asset quality trends.
Higher opex and muted fee growth were a few dampners in an otherwise strong quarter.
Asset quality metrics were encouraging with slippages at 2.5%, stable restructured book at 0.6%, and strong recoveries aiding decline in gross non-performing asset ratio by 36 bps QoQ.
Slippages included Rs 8.12 billion worth pass through certificates rated AAA which were downgraded to non-performing investment since moratorium was allowed on the pool.
Recoveries have already started and no loss is expected from this pool. Axis Bank does not intend to reverse the Rs 55 billion of contingent provisions over the medium term.
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