Axis Bank Q4 results: Net profit flat at Rs 7,118 crore, NII up 5.5%

Loan loss provisions, slippages rise

Axis Bank on Thursday reported a net profit of ₹7,118 crore for the January-March quarter (Q4) of 2024-25 (FY25), nearly flat numbers when compared to its net profit of ₹7,129 crore in the year-ago period. The flat numbers were mainly due to higher loan loss provisions and lower trading income. Trading income for the quarter stood at ₹173 crore down from ₹1,021 crore in the corresponding quarter previous year.

 

Overall non-interest income, including fee, trading, and miscellaneous income, also remained flat at ₹6,780 crore but grew 14 per cent on a sequential basis. Fee income for Q4FY25 grew 12 per cent year-on-year (Y-o-Y) to ₹6,338 crore.

 

 

The private sector lender’s net interest income rose 5.51 per cent to ₹13,810 crore. The net interest margin was at 3.97 per cent improving four basis points (bps) quarter-on-quarter. The net interest income was 4.06 per cent in the same period previous year. 

 

The bank incurred fresh slippages of ₹4,805 crore in the quarter as compared to ₹4,371 crore in the year-ago period, while upgrades and recoveries were higher at ₹2,790 crore as compared to ₹2,155 crore. Loan loss provisions increased to ₹1,369 crore from ₹832 crore.

 

“On slippages, the credit cycle is undergoing a normalisation. FY23 and FY24 were coming off troughs on slippages. It’s just the normalisation of the credit cycle plus some correction on the unsecured retail book,” said Puneet Sharma, chief financial officer, Axis Bank, during the post-earnings media call. 

 

Total advances of the lender increased 7.85 per cent and stood at ₹10.41 trillion for the quarter compared to ₹9.65 trillion in the corresponding period last year. Retail loans grew 7 per cent Y-o-Y to ₹6.23 trillion and accounted for 60 per cent of net advances. The share of secured retail loans was around 72 per cent, with home loans comprising 27 per cent of the retail book. 

 

Commenting on the slower growth of the credit card portfolio in FY25, Arjun Chowdhry, the group executive for affluent banking, non-resident Indians, cards or payments and retail lending, said that the bank will be cautious in expanding cards in force.

 

“We will be bringing back the acquisition but we will be doing so cautiously and in a calibrated manner. So I can’t give you a number but obviously we are now looking at faster growth than we had because we believe we are seeing the stabilisation which will allow us to deliver on that growth,” Chowdhry said.

 

The bank’s total deposits stood at ₹11.73 trillion in the quarter compared to ₹10.69 trillion in the year-ago period, a rise of 9.76 per cent. The share of current account-savings account deposits in total deposits increased to 41 per cent, up from 39 per cent in Q3FY25.

 

The lender’s gross non-performing assets ratio improved to 1.28 per cent in Q4 from 1.43 per cent in the corresponding period. But the net non-performing assets ratio of the bank marginally went up to 0.33 per cent from 0.31 per cent on a year-on-year basis.

 

Axis Bank’s liquidity coverage ratio (LCR) on a consolidated basis is 118 per cent. Commenting on the impact of RBI’s final norms on LCR, Sharma said, “The RBI circular is effective April 1 of next year. On a static balance sheet basis, we do believe that the circular is neutral in our context but the balance sheet is dynamic and keeps evolving. So it would be more prudent for us to comment on this closer to the implementation date than today.”