Axis Bank net profit rises 77% to Rs 402.91 cr

Buoyed by higher incomes, private sector lender Axis Bank today reported a 77 per cent rise in second quarter net profit to Rs 402.91 crore, as against Rs 227.82 crore during the corresponding period last year.

While interest income rose over 55 per cent to Rs 913.47 crore at the end of September 2008, the fee income rose by almost 91.3 per cent to Rs 626.77 crore, the bank said.

The bank said that its net interest margin for the July-September quarter improved to 3.51 per cent from 3.28 per cent during the same period a year ago.
 

FINANCIAL INDICATORS Performance in 2nd quarter ended September 30
Rs crore	2007.00	2008.00	% growth
Net interest income	588.67	913.47	55.00
Other income	382.88	694.40	81.00
Operating expenses	474.03	687.28	45.00
Operating profit	462.86	874.43	89.00
Net profit	227.82	402.91	77.00
Deposits	64112.00	1,02,885.00	60.00
Net advances	44701.00	68853.00	54.00
Investments	27346.00	37997.00	39.00
Net NPAs (%)	0.55	0.43
Gross NPAs (%)	0.95	0.91
CAR (%)	17.59	12.20

 

While the cost of funds has gone up for the banking system, Axis Bank Chairman P J Nayak said he will stick with the 3.25-3.50 per cent NIM range for the year.

He added that the focus will be on mobilising funds through current and savings accounts (Casa) though its proportion, which is estimated at around 40 per cent at present, will depend on how fast the balance sheet grows. At the end of September 2007, the share of Casa in total deposits was estimated at 45 per cent.

Nayak also said that while the bank was comfortable on Tier-I capital, it intended to raise subordinated debt of around Rs 1,500 crore to shore up the capital adequacy ratio, which had fallen to 12.20 per cent at the end of September 2008 from 17.59 per cent in the corresponding period last year.

In addition, he said that the bank will try to increase its loan book by 35-40 per cent. During July-September 2008, net advances rose 54 per cent to Rs 68,853 crore.

But Nayak said that given the current market environment, the bank will go slow on unsecured loans, while it is still bullish on mortgages and other retail loans like auto finance.

“We need to be prudent. The last thing we want is deterioration in the asset quality.” In case of credit cards, he said, there was improvement in the bad debt position during the second quarter.