Axis Bank Q2 Net up 18% Rs 1611cr on retail loan, other income

Axis Bank today posted an over 18 per cent rise in net profit at Rs 1,611 crore for the second quarter ended September 30, on the back of a healthy rise in retail loans that pushed its core interest income.
The bank, the third largest among the private sector lenders, had reported a post-tax net of Rs 1,362 crore in the corresponding period last year.
Profit growth came on the back of a healthy 20 per cent rise in the core net interest income at Rs 3,524 crore, which was one of the prime drivers of profitability, bank's Executive Director and Chief Financial Officer S K Gupta told reporters here.

Growth was largely fuelled by a healthy 27 per cent rise in the high margin retail loans, which pushed the overall credit growth to 20 per cent, Gupta said.
"Last year, retail credit growth was 3-4 per cent higher than non-retail book. This year we feel it will be faster than that," Gupta said.
The Shikha Sharma-led bank posted a 10.28 per cent rise in other income during the reporting quarter at Rs 1,947 crore, while the core fee income within that component was up 11 per cent at Rs 1,590 crore.

There was a healthy 73.82 per cent dip in miscellaneous income at Rs 86.22 crore as in the previous year, but this was offset by a Rs 282 crore repatriation from overseas branches.

The bank expanded its net interest margin to 3.97 per cent from 3.79 per cent y-o-y, on the back of a 0.07 per cent rise in the yield on advances and a 0.06 per cent dip in the cost of funds, largely due to increase in the proportion on the low-cost Casa deposits.
It expects to close the fiscal with an NIM of 3.50 per cent, Gupta said, adding the bank also expects to maintain the credit growth momentum and is targeting a 20 per cent rise and expects a deposit growth of up to 15 per cent.
The average daily Casa deposits moved up by 1 per centage point to 40 per cent, while the Casa ratio stood at 45 per cent, up from 43 per cent a year ago, Gupta said.

On the asset quality front, the bank added Rs 911 to its NPAs, while upgraded Rs 163 crore of assets and wrote off Rs 597 crore. The gross non-performing assets ratio moved up to 1.34 per cent as against 1.19 per cent y-o-y.
Gupta said the bank is on course on its target of restricting the NPA accretion to under Rs 6,500 crore during the fiscal and has added Rs 2,700 crore in bad assets in the first two quarters.