Axis Bank Q3 result: Net profit jumps 68% on-quarter, asset quality improves, slippages decline 50%

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Updated: January 22, 2018 4:08:43 PM

Axis Bank on Monday reported a rise of 68% in the net profit to Rs 726 crores for the quarter ended 31 December 2017 with the asset quality improving after the private sector lender posted heavy slippages in the preceding quarter.

Following the Q3 results, the shares of Axis Bank rose as much as 4.63% to a 52-week high of Rs 617.6 on BSE. (Image: Reuters)

Axis Bank on Monday reported a rise of 68% in the net profit to Rs 726 crore for the quarter ended 31 December 2017 with the asset quality improving after the private sector lender posted heavy slippages in the preceding quarter. The net profit of Axis Bank zoomed as high as 68% to Rs 726.4 crore on a quarterly basis while there was a rise of 25% on a year-on-year basis. Axis Bank reported a net profit of Rs 432 crore in the second-quarter ended 30 September 2017 while the net profit for the October-December stood at Rs 579.57. Axis Bank’s slippages also declined by 50% after the bank reported heavy slippages to the tune of Rs 8,110 crore. 

Axis Bank nine-month net profit stood at Rs 2,464 crore. The net interest income for the third-quarter ended 31 December grew by 9% on yearly basis. Axis Bank’s balance sheet size rose 11% on a year-on-year basis to Rs 6,43,938 crore as on 31st December 2017 while advances saw a rise of 21% to Rs 4,20,923 crore as on 31st December 2017. Axis Bank reported a marginal rise in the total revenue to Rs 2,593.08 crore in the October-December quarter of the financial year 2017-2018 from Rs 2,585.54 crore in the July-September quarter of current fiscal while it saw a drop of 21.73% on a yearly basis. Axis Bank posted a total revenue of Rs 3,400.21 crore in the corresponding quarter a year earlier.

As on 31st December 2017, the bank’s gross NPA (non-performing asset) and net NPA levels reduced to 5.28% and 2.56% from 5.90% and 3.12% as on 30th September 2017, respectively. As on 31st December 2017, Axis Bank’s provision coverage, as a proportion of gross NPAs including prudential write-offs, increased to 66% from 60% as on 30th September 2017. Following the Q3 results, Shares of Axis Bank advanced as much as 5.27% to a 52-week high of Rs 621.35 before settling up 3.52% at Rs 611.05 on BSE. “During the quarter, the bank raised equity capital of Rs 8,680 crore through a preferential allotment to a group of select investors to strengthen its CET 1 ratio while supporting future growth plans,” Axis Bank said in a press release.

In the absolute terms, the gross NPAs of Axis Bank came in at Rs 25,001 crore while net NPAs stood at Rs 11,769 crore as on 31 December 2017. The gross NPA additions for third-quarter of FY 2018 stood at Rs 4,428 crore, down from Rs 8,936 crores reported in second-quarter of FY 2018. The corporate slippages stood at Rs 2,980 crore and 93% of it came from low rated BB & below accounts. Net slippage (before write-offs) in Retail and SME stood at Rs 599 crore and Rs 166 crore respectively.

Earlier in second-quarter of the current fiscal, Axis Bank reported heavy slippages. In absolute terms, the gross NPAs shot up to Rs 27,402 crore at the end of 30 September 2017 as compared to Rs 16,379 crore at the end of the same period the previous year. The gross NPA additions for the second quarter came at Rs 8,936 crore, of which corporate slippages stood at Rs 8,110 crore.

“As on 31st December, 2017, the bank’s total loan amount outstanding against the IBC accounts mentioned in the two lists referred by RBI has declined by 14% compared to the amount outstanding as on 30th September 2017. The outstanding under these accounts stood at Rs 6,074 crore as on 31st December 2017. The Bank has also made incremental provisions of Rs 237 crore against these accounts during the quarter taking the total provisioning towards these select accounts to Rs 4,123 crore, resulting in an increased provision coverage of 68% on these select accounts,” Axis Bank added.

Other key things in pointers

  • Retail loans grew 29% to Rs 1,93,296 crore and accounted for 46% of the net advances of the bank.
  • SME loans grew 27% to Rs 54,884 crores, much higher than in recent times, partly aided by the lower base of Q3 FY 2017.
  • Corporate credit grew 12% to Rs 1,72,743 crore and accounted for 41% of net advances. Corporate loan growth was led by 49% growth in working capital loans.

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