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Axis Bank reports Rs 5,728-crore loss in Q4 on Citi biz acquisition

Barring the deal, Q4 net profit jumps 61% to Rs 6,625 crore

Axis Bank

The capital adequacy ratio of the bank stood at 17.34 per cent, common equity tier–I capital ratio at 14.02 per cent

Manojit Saha Mumbai

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Axis Bank on Thursday reported a net loss of Rs 5,728.42 crore during the January-March quarter of financial year 2022-23 as the private sector lender paid a total consideration of Rs 12,490 crore for the acquisition of Citi’s consumer business.

Axis Bank concluded the acquisition of the Citi retail and wealth management business on March 1. The transaction includes stamp duty and provisions on Citi assets to make it at par with Axis Bank standards.

Excluding the Citi deal, the profit was up 65 per cent year on year to Rs 6,625 crore.

“With the acquisition of Citibank India Consumer Business, we welcomed over 2.4 million new customers and approximately 3,200 employees to the Axis family. The deal bolsters our market presence, especially in the growth of our premium market share across wealth and cards. We are working on the synergies, some of which are already yielding favorable outcomes,” said Amitabh Chaudhry, managing director and chief executive officer, Axis Bank.

While the bank’s net interest income (NII) grew 33 per cent YoY to Rs 11,742 crore, its net interest margin (NIM) for the quarter increased 73 basis points YoY to 4.22 per cent.

While fee income for Q4 grew 24 per cent, retail fees increased 31 per cent, constituting 69 per cent of the bank’s total fee income.

The third largest private sector lender reported total deposits growth of 15 per cent YoY, within which savings account deposits grew 23 per cent and current account deposits increased 17 per cent. Total term deposits grew 11 per cent.

The share of current and savings account deposits in total deposits stood at 47 per cent, up 215 bps YoY and 261 bps sequentially.

The bank’s advances grew 19 per cent YoY to Rs 8.45 trillion as on March 31, 2023. Retail loans grew 22 per cent YoY and accounted for 58 per cent of the net advances of the bank. Home loans grew 10 per cent YoY, small business banking 50 per cent, and rural loan portfolio 26 per cent.

Unsecured personal loans grew 21 per cent YoY and credit card advances grew 97 per cent YoY.

“The share of secured retail loans was approximately 78 per cent, with home loans comprising 32 per cent of the retail book,” the bank said. Domestic corporate loan book saw on year growth of 24 per cent.

“We lifted the growth trajectory and increased market share. We continue to grow faster than the industry. On credit cards we were one of the largest issuers on a net basis. Our card issuances for Q4 hit a new quarterly high of 1.13 million, taking FY23 card issuances to 4.2 million, up 8 per cent YoY,” Chaudhry said.

Provision and contingencies for the quarter was Rs 306 crore and specific loan loss provisions was Rs 270 crore. “The bank has not utilised Covid provisions during the quarter,” Axis Bank said.

The gross NPA ratio of the bank declined by 80 bps on year to 2.02 per cent while net NPA ratio was 0.39 per cent — one of the lowest in the industry — down by 34 bps over the same period of last year.

The capital adequacy ratio of the bank stood at 17.34 per cent, common equity tier–I capital ratio at 14.02 per cent.

The bank’s board has approved a fundraising of Rs 35,000 crore by way of Indian and/or foreign currency by issue of debt instruments. The fund would be raised by issuing long-term bonds, non-convertible debentures, perpetual debt instruments, AT1 bonds, infrastructure bonds and tier II capital bonds or such other debt securities as permitted by the regulator, the bank said.


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First Published: Apr 27 2023 | 8:55 PM IST

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