The first quarterly results from the banking sector, by a new generation private sector bank, confirmed the developing pressure on bank margins. Axis Bank on Friday said growth in its net interest income (NII) declined to 3.12% in the third quarter from 3.51% in the second quarter, and 3.91% in the third quarter of last year.
At Rs 929.7 crore, the NII growth fell short of analysts? expectations by 7%. This, investment firm Religare Hichens Harrisons said, would be interpreted ?negatively? It said the lower margin has happened despite Axis Bank not lowering its prime lending rate. The net non-performing assets of the bank improved to 0.39% from 0.42% year-on-year.
However, bolstered by fee and treasury income, the bank reported a 63.24% increase in its net profit at Rs 500.86 crore for the third quarter that ended on December 31, 2008. This was much better than the market expectation of around Rs 450 crore. The bank had reported a net profit of Rs 306.83 crore during the third quarter of the
financial year ended March 31, 2007.
?Nearly Rs 85 crore of the income is by way of government bonds, which showed a substantial rise in prices, helping the bank earn substantially by way of treasury,? said Nayak. The total deposits of the bank have grown 54% from Rs 68,551 crore at the end of December 2007 to Rs 105,716 crore at the end of December 2008.
Meanwhile, in a filing to BSE, an Axis Bank statement said it would have a non-executive chairman, in addition to a managing director after the present CMD Nayak retires.?To conform to the requirements laid down by RBI, the post of chairman and chief executive officer (CEO) of the bank be separated into– non-executive chairman and managing director with effect from August 1, 2009?, the filing said.
Also, Dow Jones Indexes, a leading global index provider, has removed scandal-hit Satyam Computer from its ‘Dow Jones India Titans 30 Index’ and replaced it by Axis Bank.