Axis Bank Q3 results: Profit dips 36% to Rs 1,116 crore, NII up 14%

Axis Bank on Wednesday reported a 36 per cent fall in net profit at Rs 1,116 crore in the December quarter of FY21 as against Rs 1,756.9 crore in the corresponding period of last year. The private lender said that its profit was adversely impacted to the extent of around Rs 1,050 crore on account of prudent expenses and provisioning charges during the quarter.

The net interest income (NII), however, surged 14 per cent to Rs 7,373 crore compared to Rs 6,453 crore in the year ago period, the private lender said in a regulatory filing. The net interest margin (NIM) stood at 3.59 per cent as against 3.57 per cent for Q3FY20.

The bank's operating profit for the quarter grew 6 per cent YoY to Rs 6,096 crore.

Fee income rose by 5 per cent YoY to Rs 2,906 crores, while retail fees grew 8 per cent QoQ and constituted 64 per cent of the bank's total fee income.

Axis Bank reported total provisions and contingencies of Rs 4,604.28 crore in December quarter of 2020, compared to Rs 3.470.92 crore in the year ago period, registering a growth of 32.7 per cent.  

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"Specific loan loss provisions for Q3FY21 were Rs 1,053 crore, compared to Rs 2,962 crore in Q3 last year," said Axis Bank which has made provisions on over 90 DPD (day past due) accounts not classified as NPA pursuant to the Supreme Court judgement, at rates that would have applied to these accounts per extant provisioning rules for NPA in the banks, amounting to Rs 3,899 crore during the quarter.

The lender said that it held cumulative provisions (standard + additional other than NPA) of Rs 11,856 crore at the end of December quarter of 2020. "These cumulative provisions translated to a standard asset coverage of 2.08 per cent as on December 2020," it added.

On the asset quality front, gross non-performing assets (NPAs), as a percentage of total advances, fell to 3.44 per cent in Q3FY21 compared with 5 per cent in Q3FY20. The net NPA ratio too declined to 0.74 per cent against 2.09 per cent in same quarter last year.

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As of December 31, 2020, the bank's balance sheet stood at Rs 9,38,049 crore, up 15 per cent YoY. The total deposits climbed by 11 per cent on period end basis and by 8 per cent YoY on quarterly average balance (QAB) basis. On a QAB basis, savings account deposits grew 14 per cent YoY and 4 per cent QoQ.

The loan book (including TLTRO) grew by 9 per cent year-on-year to Rs 6,00,835 crore, while retail loans climbed 9 per cent YoY to Rs 3,17,894 crore and accounted for 55 per cent of the net advances of the bank.

Commenting on Q3 results, Amitabh Chaudhry, MD & CEO, Axis Bank said, "As the economy turns around, we see fresh enthusiasm and positivity returning to both retail and corporate business. Digital has been one of our biggest strengths and we have fortified it further. With new collaborations with the best brands in their respective fields, we have rolled out some of the most innovative products and services for our customers, with unique features and benefits."

Ahead of Q3 results, shares of Axis Bank closed Wednesday's trade at Rs 631.90, down 4.05 per cent, against previous closing price of Rs 658.60 on the BSE.