Axis Bank Q3 results: Net profit soars 224% to ₹3,614 crore

Private lender Axis Bank Ltd on Monday reported a threefold jump in its third-quarter net profit on the back of strong growth in its net interest income and improving asset quality.

Net profit of the bank surged 224% year-on-year to ₹3,614 crore in the quarter ended December 2021 compared with ₹1,117 crore in the year-ago period, according to its exchange filing.

The private lender’s net interest income (NII) rose 17% to ₹8,653 crore in the quarter compared with ₹7,373 crore in the corresponding period of the previous year. NII was up 10% on a quarterly basis.

Net interest margin (NIM) for the quarter improved by 14 basis points quarter-on-quarter to 3.53%.

On the asset quality front, the bank’s gross non-performing asset ratio slipped 36 basis points sequentially to 3.17%. On a yearly basis, GNPA declined by 138 bps.

Axis Bank said its net loan slippage ratio fell by 38 basis points quarter-on-quarter to 0.06% in the December quarter while specific loan loss provisions stood at ₹790 crore compared with ₹927 crore in Q2FY22.

Gross slippages during the quarter were ₹4,147 crore compared to ₹5,464 crore in the previous quarter and ₹7,993 crore in Q3FY21.

“The bank has not utilized Covid provisions during the quarter. The bank holds cumulative provisions of ₹13,404 crore at the end of Q3FY22,” it said in its filing.

The lender’s fee income during the quarter increased 15% year-on-year to ₹3,344 crore. While retail fee grew 16%, constituting 65% of the bank’s total fee income, retail card fee grew 21%, the corporate & commercial banking fee together grew 13%. The trading profits and miscellaneous income for the quarter stood at ₹367 crore and ₹130 crore respectively.

Its advances grew 17% year-on-year to ₹6,64,866 crore as on December 2021 and loan to deposit ratio stood at 86%. The bank said its retail loans, which account for 55% of the net advances, grew 18% year-on-year while small and medium enterprise (SME) loans jumped 10%. The lender’s corporate loan book grew 13%.

“We are optimistic about the future and plan to leverage every sustainable growth opportunity that is available to us,” says Amitabh Chaudhry, managing director and chief executive at Axis Bank.

Share of digital transactions in the bank’s total financial transactions by individual customers in the quarter stood at 92%.

The bank’s wealth management business -- Burgundy -- witnessed strong growth with assets under management (AUM) of over ₹2,66,675 crore as at end of December 2021.

It issued over 0.77 million credit cards in the October-December period, highest ever for any quarter. Credit card spends jumped 52% on a yearly basis.