Private sector lender Axis Bank on Tuesday reported an 86% year-on-year (y-o-y) jump in its Q2FY22 net profit to Rs 3,133 crore, on the back of a 60% drop in provisions to Rs 1,735 crore.
The bank’s net interest income (NII) — the difference between interest earned and interest expended — grew 7.84% to Rs 7,900 crore. The net interest margin (NIM), a key measure of profitability, fell seven basis points (bps) sequentially to 3.39%.
The bank’s advances grew 10% y-o-y to Rs 6.22 lakh crore. Retail loans grew 16% y-o-y to Rs 3.46 lakh crore and accounted for 56% of the net advances of the bank. The corporate loan book grew 1% y-o-y to Rs 2.14 lakh crore.
Total deposits grew 18% y-o-y to Rs 7.36 lakh crore. Savings account (SA) deposits grew 23% to Rs 2.23 lakh crore, while current account (CA) deposits grew 5% y-o-y to Rs 1.05 lakh crore. The CASA ratio remained flat as compared to a year ago at 44%.
Axis Bank restructured loans worth 0.64% of its advances under the framework for resolving pandemic-related stress, with the recast portfolio in the retail segment at 0.8%. the lender said 93% of restructured retail assets have a low loan-to-value (LTV) in the range of 40%-70%. The bank has an overall provision coverage of 24% on the restructured book.
The bank recognised slippages of Rs 5,464 crore during Q2FY22, compared to Rs 6,518 crore in Q1FY22. Recoveries and upgrades from NPAs during the quarter were Rs 4,757 crore, while write-offs were at Rs 2,508 crore.
The bank saw an improvement on the asset quality front in Q2, with the gross non performing asset (GNPA) ratio falling 32 bps sequentially to 3.53% and the net NPA ratio falling 12 bps to 1.08%.
Under Basel III, the Capital Adequacy Ratio (CAR) and common equity tier-I (CET-I) ratios as on September 30, 2021, including profit, were 20.04% and 15.81%, respectively. Axis Bank’s shares on the BSE fell 0.33% on Tuesday to close at Rs 842.25. The bank announced its results after the close of trade.