Axis Bank Q1 results: Net profit rises 94% to Rs 2,160 cr; NII up 11%

Private lender Axis Bank on Monday reported 94 per cent year-on-year rise in standalone net profit at Rs 2,160 crore as against Rs 1,112 crore reported in the same quarter of last year (Q1FY21).

However, on a sequential basis, the profit after tax (PAT) fell by 19 per cent from Rs 2,677 crore in the previous quarter (Q4FY21). 

The net interest income (NII) of the lender rose 11 per cent Rs 7,760 crore from Rs 6,985 crore in Q1FY21. Net interest margin (NIM) for the June quarter stood at 3.46 per cent.

Meanwhile, Fee income during the quarter rose 62 per cent year-on-year on lower base and granular fee composition improving.

Gross non performing assets (NPAs) stood at 3.85 per cent at the end of June quarter, higher than 3.7 per cent in the previous quarter, but lower than 4.72 per cent in the year-ago period.

The Bank’s operating profit for the quarter grew 10 per cent year-on-year to Rs 6,416 crore, while the core operating profit was up 13 per cent to Rs 5,896 crore. 

“Despite second wave headwinds, we made tremendous progress this quarter on our strategy of building a high quality granular franchise, increasing our relevance in the lives of the customers and the communities we serve and building the best digital bank in the country," said Amitabh Chaudhry, MD & CEO, Axis Bank.

"The journey we started two years back is gathering momentum with a strong balance sheet, conservative provisions and a steady operating performance supporting our aspirations. We continued to differentiate on our pioneering people and diversity initiatives. We have also set a bold mandate for our long-term ESG goals. We continue to monitor the macroeconomic environment closely and we remain confident about our strategy and the road ahead," Chaudhry said.

The Bank saw overall loan book growth of 12 per cent on a year-on-year basis, driven by all three business segments. The Bank’s advances grew 12 per cent over last year to Rs 6.14 trillion at the end of Q1.

The loan to deposit ratio stood at 86 per cent. Retail loans were up 14 per cent year-on-year and were largely flat on a sequential basis to Rs 3.31 trillion and accounted for 54 per cent of the net advances of the Bank.

Corporate loans increased 8 per cent YoY and 1.3 per cent QoQ, while SME loans rose 18 per cent YoY led by tech driven transformation initiative ‘Sankalp.’

The Bank’s balance sheet rose 14 per cent over last year and stood at Rs 10.12 trillion as on June 30, 2021. Total deposits, meanwhile, grew by 16 per cent on period end basis to Rs 7.13 trillion.

On the asset quality front, gross slippages during the quarter were Rs 6,518 crore, compared to Rs 5,285 crore during Q4FY21 and Rs 2,218 crore in Q1FY21. Recoveries and upgrades from NPAs during the quarter were Rs 2,543 crore while write-offs were Rs 3,341 crore.

Consequently, there were net slippages in NPAs (before write-offs) for the quarter of Rs 3,976 crores as compared to Rs 1,822 crores in Q4FY21 and net slippages of Rs 1,610 crore in Q1FY21. 

The provisions (other than tax) and contingencies for the reporting quarter stood at Rs 3,532 crore, down by 20 per cent from Rs 4,416 crore in the last year period.

Axis Bank said it has not utilised Covid provisions during the quarter. The Bank holds cumulative provisions (standard + additional other than NPA) of Rs 12,425 crores at the end of Q1FY22. This is over and above the NPA provisioning included in our PCR calculations.

At the end of Q1, the Bank’s provision coverage, as a proportion of Gross NPAs stood at 70 per cent, as compared to 75 per cent at June 30, 2020 and 72 per cent at the end of previous quarter.

The overall capital adequacy ratio (CAR) of the lender including profit for Q1 stood at 19.01 per cent with CET 1 ratio of 15.42 per cent.

Ahead of the results today, Axis Bank's scrip closed flat at Rs 754.95 on NSE.