Axis Bank back in the black with Q4 net profit of 2,677 cr

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April 28, 2021 1:30 AM

The net interest margins (NIM) of the lender declined 3 basis point (bps) sequentially to 3.56%, but showed a growth of 1 bps on a y-o-y basis.

This is despite the bank making additional provision aggregating Rs8.0bn on accounting change in provisioning rates on loans to commercial banking segment.This is despite the bank making additional provision aggregating Rs8.0bn on accounting change in provisioning rates on loans to commercial banking segment.

Private lender Axis Bank on Tuesday reported a net profit of Rs 2,677 crore for the March quarter compared to a loss of Rs 1,388 crore in Q4FY20. The lender was back in the black thanks to an 11% year-on-year (y-o-y) growth in its net interest income (NII) to Rs 7,555 crore.

The lender’s operating profit increased 17% y-o-y and 13% quarter-on-quarter (q-o-q) to Rs 6,865 crore. The bottom-line also got a support from reduced provisioning by the lender. Provisions declined 57% y-o-y and 28% q-o-q to Rs 3,295 crore. However, the bank holds provisions of Rs 5,012 crore as on March 31, 2021 against the potential impact of Covid-19.

Amitabh Chaudhry, MD and CEO of the bank, said, “There will be economic impact of the second wave of Covid-19 but we are hopeful that it will be short-lived. We have transformed ourselves in line with the evolving business scenario to become more agile, more relevant and totally dedicated to the needs of millions of customers,” he added.

The net interest margins (NIM) of the lender declined 3 basis point (bps) sequentially to 3.56%, but showed a growth of 1 bps on a y-o-y basis.
The asset quality of the lender improved during the March quarter. Gross non-performing assets (NPAs) ratio of the lender declined 85 bps to 3.7% from 4.55% in the December 2020 quarter. Similarly, the net NPAs ratio declined 14 bps to 1.19% from 0.74% in the December quarter. “Gross slippages during the quarter were Rs 5,285 crore, compared to Rs 7,993 crore during Q3FY21 and Rs 3,920 crore in Q4FY20,” Chaudhry said. “Recoveries and upgrades from NPAs during the quarter remained at Rs 3,462 crore, while write-offs were Rs 5,553 crore,” he added.

The provisioning coverage ratio (PCR) improved to 72% in the fourth quarter, compared to 69% in the same quarter last year. “On an aggregated basis, our provision coverage ratio stands at 120% gross NPAs,” the bank said.

Credit costs for the lender more than halved at 1.21% during the March quarter from 2.77% during Q4FY20.

The fee income during the March quarter stood at Rs 3,376 crore, up 15% y-o-y and 16% q-o-q. Retail fees grew 16% y-o-y and 17% q-o-q and constituted 64% of the bank’s total fee income. The trading profits and miscellaneous income for the quarter stood at Rs 789 crore and Rs 503 crore respectively. Overall, non-interest income for Q4FY21 grew 17% y-o-y to Rs 4,668 crore.

Advances grew 9% y-o-y and 7% q-o-q to Rs 6.23 lakh crore. Retail disbursements for the quarter were at new all-time highs as per lender. Disbursements in the consumer segment were up 45% y-o-y and 44% q-o-q. Similarly, rural disbursements grew 47% on a y-o-y as well as sequential basis.

The total deposits grew by 10% y-o-y to Rs 7.07 lakh crore. On a quarterly average basis (QAB) , savings account deposits grew 17% y-o-y and 6% q-o-q. Retail savings deposits grew 20% y-o-y, current account deposits grew 18% y-o-y and 10% sequentially.

The capital adequacy ratio (CAR) including profit for FY21 stood at 19.12% with CET 1 ratio of 15.4% at the end of March, 2021.

The board has authorised the bank to raise funds up to Rs 35,000 crore. The funds can be raised in Indian or foreign currency by issue of debt instruments including but not limited to long-term bonds, non-convertible debentures, perpetual debt instruments, additional tier 1 (AT 1) bonds, infrastructure bonds and tier II capital bonds.

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