Spike in treasury income boosts Axis Bank Dec qtr net by 18 pc

Country's third largest private sector lender Axis Bank today posted 18.4 per cent increase in December quarter net profit at Rs 1,899.76 crore, up from Rs 1,604.11 crore a year-ago, on the back of a massive jump in treasury income.
The bank's core net interest income rose 20 per cent to Rs 3,590 crore during the reporting quarter, while the other income grew at higher 24 per cent to Rs 2,039 crore, because of treasury gains.
The higher profit comes despite a marginal drop in its net interest margin at 3.93 per cent and an increase in gross non-performing assets ratio at 1.34 per cent.

Axis Bank Executive Director S K Gupta said the bank booked treasury gains of Rs 329 crore as against Rs 35 crore in the year-ago period. This was largely due to a softening in yields which presented an opportunity to sell, he said.
The bank witnessed a 23 per cent rise in advances during the reporting quarter, driven largely by a growth in the high margin segment within the retail advances like unsecured loans and loans against property.
The lender is targeting to close the fiscal with 20-22 per cent credit growth, he said, elaborating that retail segment which constitutes 38 per cent of the book at present, would grow at 25 per cent, while corporate segment (47 per cent) would grow at 20 per cent to 21 per cent.

Asked about outpacing the market on corporate loan growth and the reasons behind it, Gupta said the demand largely came from high-rated corporates looking at opportunities to refinance due to rates trending lower, as also external debt, where it has accumulated a book of USD 7.76 billion through its five branches.

Gupta said demand for home loans is not as high now and the bank expected it to continue to remain subdued going ahead as well.
"Axis Bank's Q3FY15 results came in line with our expectations," said Saday Sinha, banking analyst, Kotak Securities.
The bank's scrip gained 0.15 per cent to close at Rs 514.90 per piece on the BSE, as against the 0.17 per cent gains in the benchmark Sensex.