Net interest income grew 15.54% to R3,310.49 crore and as a consequence, net interest margins (NIMs) at the bank expanded 2 basis points (bps) over last year to 3.88%, but on a sequential basis, NIMs reduced by 1 bp. Somnath Sengupta, the executive director, said Axis Bank is looking to maintain NIMs at 3.5% for the full year.
However, other income at the bank was at R1,691.05 crore, down 5.07% y-o-y due to lower growth in corporate credit. On other income, it is really reflective on the slowdown in the corporate business. Corporate loan growth in the system has been slow on the whole. So, therefore, that segment where the fee income we get from loan processing fee, debt syndication and loan syndication has been much slower than we normally have, Sengupta said.
Asset quality deteriorated at the bank and gross non-performing assets (NPAs), in absolute terms, rose 30.10% y-o-y to R3,463.27 crore. In terms of ratios, gross NPAs moved up 12 bps sequentially to 1.34% and net NPAs moved up by 4 bps in the quarter. In the quarter, gross NPA additions were R626 crore while recoveries and upgrades were R97 crore and write-offs were R212 crore. Restructured loans added during the quarter were R480 crore and the cumulative value of net restructured advances at the end of Q1 was R6,289 crore or 2.47% of net customer assets.
Provisions at the bank decreased to R386.60 crore, down 45.72% y-o-y. We had provided R120 crore last year and we had a write back of R15 crore this year. We've also had some reduction in the NPA provisions, Sengupta explained on provisions. He added that the bank provided R48 crore on unhedged foreign currency exposures in Q1 and that the bank provided R193 crore for the entire year. The bank also said the unhedged foreign currency exposure provision will have an impact of 26 bps on its capital adequacy ratio.
Advances at the bank grew 16% y-o-y to R2,30,535 crore. In the quarter, the bank reorganised the agriculture lending business, and the retail portion of agriculture advances has been merged with the existing retail advances, while non-retail agriculture advances have been merged with the SME business.
Deposits at the bank grew 14.08% y-o-y to R2,72,004 crore and the current accounts savings accounts (Casa) ratio was 40% of total deposits.