Axis Bank Q2 net profit at Rs 3,383 crores on lower bad loan provisions

Mumbai, Oct 26 (PTI) Axis Bank on Tuesday reported a net profit of Rs 3,382.78 crore on a consolidated basis for the September quarter, driven by lower loan provisions as asset quality improved.

The third largest private sector lender reported a net of Rs 3,133.32 crore for the July-September period on a standalone basis, which is its highest ever for any quarter.

Its managing director and chief executive Amitabh Chaudhry exuded confidence that the second half will be better as the consumer and business confidence is returning back on the back of vaccinations and asserted that all the legacy asset quality issues are behind for it now.

The net slippages declined 82 per cent when compared with preceding June quarter at Rs 707 crore, and helped in the gross non-performing assets ratio improving to 3.53 per cent as against 4.13 per cent in the year-ago period. The gross slippages during the quarter were Rs 5,464 crore.

Consequently, the overall provisions were also down at Rs 1,735 crore as against Rs 4,342 crore in the year-ago period, and none of the over Rs 5,000 crore of COVID provisions were drawn down during the quarter. 

The overall restructured assets stand at 0.64 per cent of the overall customer assets and have been adequately provided for which gives the lender a confidence that it will not impact, its chief financial officer Puneet Sharma said.

Its core net interest income grew 8 per cent to Rs 7,900 crore on a 10 per cent loan growth and net interest margin coming at 3.39 per cent. Sharma said in a rising interest rate scenario, the margins will go up as liabilities get re-priced with a lag.

The non-interest income grew 6 per cent to Rs 3,798 crore and the treasury side showed a de-growth as profit booking had happened last year in the same period. 

The loan growth was driven by retail at 16 per cent and mid-corporate at 32 per cent, the bank said, and executives maintained that they expect the latter to keep going up. It has also seen a very high growth in the 'buy now pay later' loans to aid purchases.

The corporate loan book grew at 1 per cent, and its executive director Rajiv Anand said "we are at the bottom of the capital expenditure cycle and once promoters become more confident, investment decisions will be made". 

Chaudhry said the bank will be witnessing a faster growth in rural and semi-urban areas going ahead and has strategised for the same. 

Its overall capital adequacy ratio stood at 20 per cent with the core tier-I at over 15 per cent, Sharma said, adding that this excludes the additional money set aside as COVID provisions.

Among the subsidiaries, the asset management company posted a 60 per cent jump in the H1 net at Rs 147 crore, the NBFC had its profit growing 84 per cent to Rs 138 crore for the same period, and investment banking's net grew 72 per cent to Rs 98 crore.

The bank scrip closed 0.33 per cent down at Rs 842.25 apiece on the BSE on Tuesday as against gains of 0.63 per cent on the benchmark. 

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