Axis Bank Q3 results: Profit rises 4%, meets Street estimates; asset quality improves

Axis Bank Ltd on Tuesday said its standalone profit rose 4 per cent year-on-year (YoY) to Rs 6,071.10 crore for the December quarter compared with Rs 5,853,07 crore in the same quarter last year. A couple of brokerages estimated profit to growth at about 4 per cent.  Net interest income (NII) for the quarter came in at Rs 12,532 crore, up 9 per cent. Net interest margin (NIM) stood at 4.01 per cent. Analysts were expecting NIM around 4 per cent.

Asset quality as suggested by gross non-performing assets (NPAs) as percentage of total advances improved to 1.58 per cent against 1.73 per cent in the September quarter and 2.38 per cent in the same quarter last year. Provisions for the quarter came in at Rs 1,028,34 crore against Rs 814.56 crore in the September quarter and Rs 1,437.73 crore in the year-ago period. Axis Bank's total provision and contingencies included specific loan loss provisions of Rs 691 crore. During the quarter, the bank made a full provision on its entire AIF investments aggregating Rs 182 crore.

Gross slippages during the quarter were Rs 3,715 crore compared with Rs 3,254 crore in the September and Rs 3,807 crore in the year-ago quarter. Recoveries and upgrades from NPAs for the quarter stood a Rs 2,598 crore. The bank in the quarter wrote off NPAs aggregating Rs 1,981 crore, Axis Bank said.

Axis Bank said it has not utilised Covid provisions during the quarter. The bank holds cumulative provisions of Rs 11,981 crore at the end of Q3FY24. It is pertinent to note that this is over and above the NPA provisioning included in PCR calculations.

"These cumulative provisions translate to a standard asset coverage of 1.29 per cent as on December 31. On an aggregated basis, our provision coverage ratio stands at 153 oer cent of GNPA as on December 31, 2023. Credit cost for the quarter ended 31st December, 2023 stood at 0.28 per cent," Axis Bank added.

Axis Bank said its fee income grew 29 per cent YoY and 4 per cent QOQ to Rs 5,170 crore. Retail fees were up 36 per cent YoY and 6 per cent QOQ; and constituted 72 per cent of Axis Bank's total fee income. Retail cards and payments fee grew 52 per cent YOY and 10 per cent QOQ, Axis Bank said in a BSE filing.

"Retail Assets (excluding cards and payments) fee grew 26 per cent YoY and 7 per cent QoQ. The Corporate & Commercial banking fees together grew 15 per cent YoY to Rs 1,471 crore. The trading income gain for the quarter stood at Rs 291 crore; miscellaneous income in Q3FY24 stood at Rs 94 crore. Overall, non-interest income (comprising of fee, trading and miscellaneous income) for Q3FY24 grew 22 per cent YoY to Rs 5,555 crore," it said.

What management says

MD & CEO Amitabh Chaudhry said, “The conversations on India are buoyant and it’s being looked upon as an important investment destination, evident in discussions at global platforms like the World Economic Forum. The Indian economic momentum has been strong in FY24, and we believe the trend will continue well into FY25."

At Axis Bank, said Chaudhry, focus has been on sustainable and inclusive growth, with customer taking the centerstage in every discussion.

On Tuesday, Axis' scrip on BSE closed trading nearly 3 per cent lower at Rs 1,088.9.