Axis Bank Q1 net profit surges 41% on higher business income

economictimes.indiatimes.com:

Axis Bank, India's fourth-biggest private lender by market value, Wednesday reported a 41% rise in its June quarter net profit to ₹5,797 crore on the back of higher business income. The bank had posted profits of ₹4,125 crore a year ago. Bank's net interest income (NII), or core income, climbed 27% on year to ₹11,959 crore versus ₹9,384 crore in the same period last year.

Net interest margin, or NIM, at 4.10% was up 50 basis points on year. «We have begun the new fiscal year with strong operating performance across segments,» said Amitabh Chaudhry, MD, Axis Bank. «We also accelerated our progress in identified areas of distinctiveness namely Digital, Bharat Banking and Customer Obsession while working on synergies from acquired Citi businesses.

We remain watchful about the emerging macro variables, and we are fine-tuning our strategy to continue to deliver a sustainable and predictable performance.» The bank management also said that the sequential drop in NIMs was largely owing to repricing of deposits at the bank. «We expect the pace of repricing of deposits to get slower for the rest of the financial year,» said Puneet Sharma, chief financial officer at Axis Bank. The asset quality position for the lender improved, with the gross non-performing asset ratio coming at 1.96% as of June 30.

The net NPA ratio was 0.41%. Provisions for the quarter were ₹1,035 crore, as compared with ₹359 crore a year ago. «While loan growth was strong, the deposit growth was weaker than peers, also NIM decline was in line with peers despite the benefit of Citi portfolio,» said Pranav Gundlapalle, head, India Financials, Bernstein.