Axis Bank profit rises 10% to Rs 5,864 crore in September quarter, beats estimates

The country's third largest private sector lender Axis Bank on Wednesday reported better-than-expected September quarter earnings on the back of stable asset quality and healthy growth in loan portfolio.

Axis Bank's net profit in the second quarter of current financial year came in at Rs 5,864 crore, marking an increase of 10 per cent from Rs 5,330 crore during the same period last year. Its net interest income (NII) or the difference between interest earned and interest expended rose 19 per cent to Rs 12,315 crore as against Rs 10,360 crore in the year ago period.

Net interest margin, a barometer of the bank's profitability, increased to 4.11 per cent in the September quarter, up 15 basis points from a year ago, and up 1 basis point from the earlier quarter.

Analysts on an average were expecting the bank to report net profit of Rs 5,676 crore, as per LSEG data.

Loan demand during the September quarter stayed strong as an uptick in consumer spending helped drive retail credit. The upcoming festive season is expected to further boost spending.

Banks have experienced margin pressure in the last two quarters as deposits were re-priced with a lag following the 250-basis-point rise in the policy interest rates since May 2022.

Axis Bank's asset quality remained stable at the end of September quarter as its gross non-performing assets (NPA), as a percentage of total advances, came in at 1.73 per cent compared with 1.96 per cent in the previous quarter. Its net NPA came in at 0.36 per cent as against 0.41 per cent in first quarter.

During the quarter, the bank added 207 branches taking its overall distribution network to 5,152 domestic branches and extension counters situated across 2,864 centres compared to 4,760 domestic branches and extension counters situated across 2,676 centres.

Axis Bank shares ended 0.84 per cent lower at Rs 955.35 ahead of its earnings announcement.