Axis Bank Q4 Results: Profit Rises 17%, Beats Estimates
Net profit for the quarter came in at Rs 7,129.7 crore, as compared with a loss of Rs 5,728.4 crore a year ago.
Private sector lender Axis Bank Ltd.'s standalone net profit rose in the fourth quarter of fiscal 2024, beating analysts' estimates.
Net profit for the quarter came in at Rs 7,129.7 crore, as compared with a loss of Rs 5,728.4 crore a year ago. Analysts polled by Bloomberg estimated a net profit of Rs 6,261 crore for the quarter.
On a sequential basis, the net profit rose 17.4%.
Axis Bank's bottom line is not comparable on a yearly basis, due to the merger of Citibank’s consumer banking business with Axis Bank, with effect from March 1, 2023.
The total income of the bank for the reporting quarter increased to Rs 35,990 crore, from Rs 28,758 crore a year ago.
The net interest income of the bank was up 11% year-on-year at Rs 13,089 crore for the reporting quarter. The net interest margin for the March quarter stood at 4.06%, up 5 basis points quarter-on-quarter.
Axis Bank Q4 FY24 Highlights
Net profit up 17.4% at Rs 7,129.7 crore vs Rs 6,071 crore.
Net interest income rose 4% to Rs 13,089 crore vs Rs 12,532 crore.
Gross NPA at 1.43% vs 1.58% (QoQ).
Net NPA at 0.31% vs 0.36% (QoQ).
Axis Bank's total business grew 13% during Q4, with total deposits increasing 13% year-on-year to Rs 10.7 lakh crore.
"Deposit growth will remain constrained and liquidity will remain tight, as a result of which the loan growth will also reflect the same," said Amitabh Chaudhry, chief executive officer of the bank.
The bank has taken deliberate planned steps to build the strength of the deposit franchise, which resulted in sustained deposit growth through FY24. The trend is likely to continue in FY25 as well, he said.
Advances grew 15% year-on-year to Rs 9.65 lakh crore, out of which retail loans that account for 60% of net advances of the bank, grew 20% YoY. On a sequential basis, advances rose 4%. Home loans grew 5% year-on-year, personal loans by 31% and credit card advances by 30%. Small business banking gained 33% and the rural loan portfolio by 30%.
The demand for corporate loans is broad-based across sectors, and the pipeline for incremental demand continues to be quite strong, Deputy Managing Director Rajiv Anand said. But, tight liquidity conditions have compelled corporates to borrow from the debt market, he said.
Axis Bank has capabilities in both debt capital markets and loan origination, due to which "income on the wholesale bank-side may not come through NII but fee income" going forward, Anand said.
The current-account-savings-account ratio stood at 43% at the end of the March quarter. The bank's term deposits rose 22% year-on-year to Rs 6.09 lakh crore during Q4. The bank's management said that their credit-to-deposit ratio was at 90.31%, as of March 31.
Provisions and contigencies during the quarter rose significantly to Rs 1,185.3 crore, out of which loan loss provisions for the quarter stood at Rs 832 crore. These loan provisions were on account of a rise in share of unsecured loans in the asset mix, the bank's Chief Financial Officer Puneet Sharma said, in a post-earnings call.
"The bank has not utilised Covid-19 provisions during the quarter and these are reclassified to other provisions," the bank said in its investor presentation.
The bank reclassified Covid-19 provisions of Rs 5,012 crore as other provisions. The bank held cumulative provisions, including standard and additional provisions other than non-performing assets of Rs 12,134 crore, at the end of March. These cumulative provisions are "over and above the NPA provisioning included in provision coverage ratio calculations", the bank said.
The provision coverage ratio of the bank was 79%, as of March 31.
In the management's address to reporters, the bank said that no write-back of provisions was made against its exposure to alternate investment funds. In the previous quarter, the bank provided Rs 181 crore for its investments in AIFs.
Credit cost for the quarter-ended March stood at 0.32%.
Net slippages for the quarter stood at Rs 398 crore, while retail slippages were at Rs 1,061 crore. Recoveries and upgrades were at Rs 2,155 crore, and the bank wrote-off loans worth Rs 2,082 crore.
The capital adequacy ratio of the bank stood at 16.63%, with tier-1 ratio at 13.8%.