Axis Bank back in the black, posts net profit of Rs 2,677 crore in Q4

Net interest income rises 11% to Rs 7,555 cr; lender's Board didn't propose any dividend for year ended March 31, 2021

Axis Bank on Tuesday reported a return to profit at Rs 2,677 crore in the quarter ended March 2021 due to a sharp fall in provisions. 

The lender had reported standalone net loss of Rs 1,388 crore in the year-ago period. 

Net interest income rose 11% to Rs 7,555 crore as against Rs 6,808 crore a year ago. The provisions and contingencies during the quarter fell 58% to Rs Rs 3,295 crore as against Rs 7,730 crore in year-ago period.

The lender said its loan book grew 12% on an annual basis and 8% on sequential basis.

Amitabh Chaudhry, MD&CEO, Axis Bank said: “As an organization, we have traversed a phenomenal distance last year. We

have transformed ourselves in line with the evolving business scenario to become more agile, more relevant and totally

dedicated to the needs of millions of customers. From strengthening our digital capabilities, providing flexible employment opportunities to playing our part in the community during these difficult times, Axis has come a long way and we hope to continue with the good work.”

"On an aggregated basis (specific+ standard+ additional + Covid), our coverage ratio stands at 120% of GNPA at 31st March, 2021," said Axis Bank in a stock exchange filing. 

"The Board of Directors of the Bank at their meeting held today have considered it prudent to not propose any dividend for

the year ended 31st March, 2021, in light of the situation developing around Covid-19 in the country and related uncertainty that it creates," the lender said. 

Gross slippages during the quarter were Rs 5,285 crore, as compared to Rs 7,993 crore during Q3FY21 and Rs 3,920 crore in

Q4FY20. Slippages from the loan book were at Rs 5,038 crore.

Total income during the latest quarter stood at Rs 20,213.46 crore against Rs 20,219.57 crore in the year-ago period, Axis Bank said in a regulatory filing.

On consolidated basis, the lender posted a net profit of Rs 2,960.40 crore during the quarter ended March 2021 against a loss of Rs 1,250.09 crore in the year-ago period.

Total income increased to Rs 21,028.45 crore in the latest quarter from Rs 20,786.23 crore in the same period a year ago.

Gross non performing assets (NPAs) fell to 3.70% of the gross advances as on March 31, 2021, from 4.86% in the year-ago period.

Net NPAs too came down to 1.05% from 1.56%.

During the quarter, the bank made additional provision aggregating Rs 803 crores on account of change in NPA provision rates on loans to Commercial Banking segment. Net of the adjustments, specific loan loss provision for fourth quarter would have been Rs 1,969 crore.

Meanwhile, the board authorized the bank to raise funds in Indian or foreign currency by issue of debt Instruments including but not limited long term bonds, non-convertible debentures, perpetual debt instruments, AT 1 Bonds, Infrastructure Bonds and Tier II Capital Bonds up to an amount of Rs 35,000 crore.

It further said, the shareholders' funds of the bank grew 20% on annual basis and stood at Rs 1,01,603 crore as on March 31, 2021.

Under Basel III, the Capital Adequacy Ratio (CAR) and CET1 ratio as on March 31, 2021 including FY'21 profits were 19.12% and 15.40% respectively.

Additionally, the bank held Rs 5,012 crores of COVID-19 provisions, not considered for CAR calculation providing cushion of 69 basis points over the reported CAR. The Book value per equity share increased from Rs 301 as of March 31, 2020 to Rs 332 as of March 31, 2021.

Axis Bank completed the stake acquisition in Max Life Insurance Company Limited (Max Life) earlier this month and now together with its subsidiaries, Axis Capital and Axis Securities, owns 12.99% stake in the company and is a co-promoter of the company.

The bank has three nominee directors on the Board of Max Life. Axis Bank has shared a strong business relationship with Max Life for over a decade now distributing the long-term saving and protection products to nearly 2 million customers, generating aggregated total premium of over Rs 40,000 crore through this partnership.

Both companies have invested extensively in product and need-based sales training, thereby leading to a consistent increase in productivity, it added.

On Tuesday, the lender's scrip on NSE closed nearly flat at Rs 701.