MUMBAI, JAN 18
Axis Bank Limited, the country’s third-largest private-sector lender, on Thursday reported a consolidated net profit growth of 3.8% for the quarter ended December 31, 2024, to Rs 6,304 crore versus Rs 6,071 crore posted in the year-ago period, owing to a rise in loan-loss provisions on account of an uptick in fresh slippages and a muted increase in net interest income (NII) and other income.
Axis Bank earned interest income of Rs 30,954 crore in Q3FY25, witnessing an 11% gain over Rs 27,961 crore posted in the year-ago period.
- NII grows 9 per cent Y-o-Y to Rs 13,606 crore on account of muted growth in advances
- 9MFY25 Operating profit at Rs 31,353 crores, up 18% YOY, PAT at Rs 19,256 crores up 9% YOY
- Retail loans grow 11% | 1%, SME grew 15% | 3% on YOY | QOQ basis, Corporate loans (gross of IBPC3) grew 4% YOY
NII grew 9 per cent Y-o-Y to Rs 13,606 crore on account of muted growth in advances. During the same period, other income grew 8 per cent Y-o-Y to Rs 5,972 crore.
The net interest margin, a measure of banks’ profitability, stood at 3.93 per cent, a drop of 6 basis points (bps) from the previous quarter, and 8 bps from the corresponding period a year ago.
The bank reported fresh slippages of Rs 5,432 crore, up 46 per cent Y-o-Y and 22.25 per cent sequentially.
Of this, Rs 4,923 crore is on the retail portfolio; Rs 215 crore in the SME (small and medium enterprise) business; and Rs 294 crore on the wholesale books.
Amitabh Chaudhry, MD & CEO, Axis Bank commented, “We closed 2024 on a high, firming up our businesses, our capabilities, our presence across the length and breadth of the country with hundreds of new bank branches. Digital and Rural have been our big drivers, along with Sustainability and Inclusivity. This quarter we also rehashed our brand credo – celebrating our customer first approach through our new campaign Har Raah Dil Se Open. It’s a reminder for us to stand committed to the evolving needs and aspirations of our customers. The Axis team is upbeat and eager to unlock the opportunities of 2025, supporting the ambitions of a resurgent India, as it looks forward to becoming the third largest global economy in the next few years.”
Loan-loss provisions went up to Rs 2,185 crore in Q3 as against Rs 1,441 crore in Q2 and Rs 691 crore in Q3FY24.
Provisions and contingencies stood at Rs 2,156 crore in Q3 because other provisions reduced substantially, compared to Rs 2,204 crore in Q2 and Rs 1,028 crore in Q3FY24.
“Our provisions are largely towards the retail unsecured portfolio, which has slipped, given the current market environment. We have taken corrective action on a look-forward basis on that portfolio. We have previously indicated that across the industry, personal loans and the credit card as a portfolio have been seeing higher levels of risk than they historically ran. We continue to monitor these portfolios,” said Puneet Sharma, chief financial officer.
Gross non-performing assets (NPAs) stood at 1.46 per cent at the end of the December quarter and net NPAs were 0.35 per cent.
At the end of the September quarter, gross NPAs were 1.44 per cent and net NPAs 0.34 per cent.
The bank’s advances grew 9 per cent Y-o-Y and 1 per cent sequentially to Rs 10.14 trillion, driven by 11 per cent Y-o-Y growth in retail loans, which accounted for 60 per cent of the bank’s advances portfolio.
Under retail loans, home loans grew 3 per cent Y-o-Y, personal loans 17 per cent, credit card advances 8 per cent, small business banking 20 per cent, and the rural loan portfolio grew 17 per cent.
Additionally, the SME portfolio grew 15 per cent and corporate loan books 4 per cent, with domestic corporate books 3 per cent.
“In this quarter, we have been more careful about growth in some of the segments in which we see some stress and therefore we have calibrated growth in those segments. Because of this we have taken calls on which segments to push and which segments to go easy on. We are confident that on a yearly basis we will continue to see good growth in our advances,” said Subrat Mohanty, executive director, Axis Bank.
On the other hand, the bank’s deposits grew 9 per cent Y-o-Y, increasing in tandem with the loan portfolio. Of this, current account deposits grew 8 per cent and saving account deposits remained flat.
