Axis Bank Q3 net profit declines 36% to Rs 1,116 crore, NII grows 14%

The lender's gross NPAs declined to 3.44 per cent from 4.18 per cent in September quarter (Q2FY21) . Net NPAs stood at 0.74 per cent

Private lender Axis Bank reported a net profit of Rs 1,116 crore for the quarter ending December 2020 (Q3FY21), a decline of 36 per cent year-on-year from Rs 1,756.9 crore during the same period a year ago (Q3FY20). The profit was Rs 1,682.7 crore in the September quarter of FY21 (Q2FY21).

The Mumbai-based lender's net interest income (NII), the difference between interest earned and interest the bank pays out, grew 14 per cent year-on-year to Rs 7,373 crore for the period under review. NII was Rs 6,452.98 crore during the same period a year ago (Q3FY20). NIM stood at 3.59 per cent in Q3FY21 as against 3.57 per cent for Q3FY20.

Other income was marginally down at Rs 3,776 crore during the quarter compared to Rs 3,786.57 crore a year earlier.

"Reported profit after tax (PAT) during the quarter are adversely impacted to the extent of around Rs 1,050 crore on account of prudent expenses and provisioning charges," the lender said in a filing.

The bank's operating profit grew 6 per cent year-on-year to Rs 6,096 crore, while core operating profit was up 10 per cent year-on-year. The lender's total deposits grew 11 per cent year-on-year during the quarter under review, at Rs 6.5 trillion.

Axis Bank’s advances including TLTRO investments grew 9 per cent to Rs 6 trillion as on December 31 2020. The loan to deposit ratio stood at 89 per cent. Retail loans showed a growth of 9 per cent year-on-year to Rs 3.17 trillion and accounted for 55 per cent of the net advances of the Bank. 

On the asset quality front, the lender's gross non-performing assets (GNPAs) declined to 3.44 per cent compared in 4.18 per cent in the September quarter. The net NPAs stood at 0.74 per cent.

The bank said, the reported gross slippages for quarter were almost nil, since the entire quarter was subject to the standstill benefit, pursuant to the Supreme Court decision. Gross slippages during the quarter per IRAC norms were Rs 6,736 crore, compared to Rs 1,572 crore during Q2FY21 and Rs 6,214 crore in Q3FY20. Slippages from the loan book per IRAC norms were at Rs 6,499 crore and that from investment exposures stood at Rs 236 crore. 

"Specific loan loss provisions for the December quarter were Rs 1,053 crore, compared to Rs 2,962 crore during the same period a year ago. The Bank has made provisions on 90+ DPD accounts not classified as NPA pursuant to the Supreme Court judgment, at rates that would have applied to these accounts per extant provisioning rules for NPA in the Banks, amounting to Rs 3,899 crore during the quarter," the bank said.

Total provisions and contingencies made by the lender is at Rs 4,604.28 crore for the quarter under review, up 0.5 per cent sequentially.

Commenting on the results, Amitabh Chaudhry, MD & CEO of Axis Bank said, “As the economy turns around, we see fresh enthusiasm and positivity returning to both retail and corporate business. Digital has been one of our biggest strengths and we have fortified it further."

"With new collaborations with the best brands in their respective fields, we have rolled out some of the most innovative products and services for our customers, with unique features and benefits,” he said.

Shares of Axis Bank closed 3.77 per cent lower before the results were announced.