Axis Bank on Tuesday reported a year-on-year fall of 1.2% in its net profit for the March quarter at R2,154.28 crore primarily due to a 65% surge in provisions.
Total income for the quarter stood at R13,592.97 crore, up 9.8% y-o-y. The growth in revenue was mainly driven by the retail banking business, which reported a total revenue of R9,061.88 crore for the quarter under review, up 21% from the same quarter last year. Income from the bank’s wholesale banking business rose 8.4% to R6,405.24 crore.
In a post-results conference call, chief financial officer (CFO) Jairam Sridharan said that within the retail portfolio, the personal loan and credit card segments grew at over 40% each year-on-year, the automobile loans segment rose by close to 30%, and the home loans segment grew by 16%.
Sridharan added that on the wholesale side, the bank was witnessing increasing demand for loans from mid-sized corporate clients.
For the quarter under review, Axis bank reported net interest income (NII) of R4,553 crore, almost 20% higher than in the March quarter last year.
Net interest margin (NIM), which is percentage measure of the difference between net interest income and total interest-generating assets, stood at 3.97% as against 3.81% last year.
The private sector lender also reported a year-on-year rise of close to 65% in its provisions, which came in at Rs 1,168.33 crore for the reporting quarter. Incidentally, this was also 64% higher than its provisions last quarter.
Sridharan said R100 crore of the total provisions figure was towards loans given to the Punjab government for procurement of foodgrain. Further, Rs 300 crore of the provisions was on account of contingency provisions that the bank started making last quarter. As on March 31, the contingency reserve stood at R480 crores, the CFO said.
Gross NPA as a percentage of total advances stood at 1.67%, higher by 33 basis points. Net NPA came in at 0.70%, 26 bps higher than in the March quarter last year.