Axis Bank Q3 profit rises 4.5% to Rs 1,757 crore; asset quality improves

Private lender Axis Bank on Wednesday reported a 4.52 per cent year-on-year (YoY) growth in its standalone net profit to Rs 1,757 crore for the third quarter ended December 31, 2019. The Mumbai-headquartered private lender's net profit stood at Rs 1,681 crore in the same quarter last year.

During the September quarter, the bank had posted a loss of Rs 112.1 crore due to one-time impact of deferred tax asset (DTA).

The net interest income (NII) of the Axis Bank climbed by 15 per cent to Rs 6,453 crore during October-December quarter of current fiscal compared to Rs 5,604 crore in December quarter of last fiscal.

The other income (non-interest income), which comprises of fee, trading profit and miscellaneous income, fell by 5 per cent to Rs 3,787 crore compared to Rs 4,001 crore in the same quarter last year.

The operating profit of Axis bank rose 4 per cent to Rs 5,743 crore from Rs 5,525 crore in Q3FY19. While operative revenue grew 7 per cent YoY to Rs 10,240 crore, operating expenses jumped 10 per cent to Rs 4,497 crore on the yearly basis.

During the quarter under review, provisions and contingencies of the Axis Bank stood at Rs 3,470.92 crore, which was lesser than Rs 3,054.51 crore in the same quarter last year, but higher than Rs 3,518.39 crore in the September quarter.

"As on 31, December 2019, Axis Bank has additional provisions of Rs 2,558 crore towards various risk contingencies, over and above the regular NPA provisioning and the 0.4 per cent standard assets provisioning requirement. These Rs 2,558 crore of provisions are not counted towards provision coverage ratio calculations of the bank," it said in an exchange filing.

Gross slippages increased to Rs 6,214 crore during Q3FY20, compared to Rs 4,983 crore in Q2FY20 and Rs 3,746 crore in Q3FY19, due to exposure to telecom sector.

On the asset quality front, the bank's gross non-performing assets (NPAs) ratio declined to 5 per cent versus 5.75 per cent in the year-ago quarter. Net NPA also improved to 2.09 per cent against 2.36 per cent in the corresponding quarter last year.

As on 31 December 2019, the bank's Gross NPA stood at Rs 30,073 crore and Net NPA stood at Rs 12,160 crore.

During the December quarter, the bank added 131 branches (including extension counters) to its network across the country. As on 31 December 2019, the bank had a net work of 4,415 domestic branches and extension counters situated in 2,521 centres compared to 3,964 domestic branches and extension counters situated in 2,321 centres last year.

The private lender's balance sheet grew 8 per cent y-o-y to Rs 8,19,039 crore as on December 31, 2019. The bank's advances grew 16 per cent on yearly basis to Rs 5,50,138 crore, while domestic loans rose 18 per cent and the overseas book de-grew by 7 per cent.

Retail loans, which accounted for 53 per cent of the net advances of the bank, grew 25 per cent YoY to Rs 2,91,554 crore, driven by all product segments across home loans, auto loans, personal loans, and small business loans.

Ahead of Q3 results, shares of Axis Bank closed trade at Rs 710 apiece, down 1.08 per cent, on the BSE on Wednesday.

By Chitranjan Kumar