Axis Bank Q1 Results: Profit jumps 94%

 

Axis Bank, country's third largest private sector lender, posted a standalone profit of Rs 2,160.15 crore for the quarter ended June 2021 (Q1FY22), thereby rising 94.2 percent year-on-year (YoY) due to low base.The standalone profit in Q1FY21 at Rs 1,112.17 crore was impacted by the higher provisions due to nationwide lockdown to control COVID spread.

Net interest income, the difference between interest earned and interest expended, grew by 11.1 percent to Rs 7,760.27 crore in Q1FY22, from Rs 6,985.31 crore in the corresponding period last fiscal.

"The balance sheet grew 14 percent YoY and stood at Rs 10,12,050 crore as on June 2021. The total deposits grew by 16 percent on period end basis and by 11 percent YoY on quarterly average balance (QAB) basis," said Axis Bank, adding advances grew 12 percent YoY to Rs 6,14,874 crore as on June 2021.

The bank further said retail loans grew 14 percent YoY and were largely flat on a sequential basis to Rs 3,31,242 crore and accounted for 54 percent of the net advances. The share of secured loans was around 80 percent, with home loans comprising 37 percent of the retail book, it added.

Provisions and contingencies remained elevated at Rs 3,532.01 crore in Q1FY22, higher by 7.2 percent compared to Rs 3,294.98 crore in Q4FY21, but have fallen 20 percent compared to Rs 4,416.42 crore in Q1FY21, the period which impacted by COVID-led lockdown.The bank has not utilised COVID provisions during the quarter. It holds cumulative provisions (standard + additional other than NPA) of Rs 12,425 crore at the end of Q1FY22.

Asset quality weakened for the June 2021 quarter. The gross non-performing assets as a percentage of gross advances increased 15 bps sequentially to 3.85 percent and net NPA as a percentage of net advances rose 15 bps QoQ to 1.20 percent in Q1.Gross slippages during the quarter were Rs 6,518 crore, which were higher than Rs 5,285 crore logged during Q4FY21 and Rs 2,218 crore in Q1FY21.

"Slippages in Q1FY21 were moderated due to regulatory forbearances that do not exist in the current quarter. Recoveries and upgrades from NPAs during the quarter were Rs 2,543 crore while write-offs were Rs 3,341 crore. Consequently, there were net slippages in NPAs (before write-offs) for the quarter of Rs 3,976 crore," said Axis Bank.

As of June 2021, the bank's provision coverage, as a proportion of gross NPAs at 70 percent was lower compared to 72 percent as of March 2021.

"The standard restructured loans under resolution framework for COVID-19 related stress as of June 2021 stood at Rs 2,192 crore that translates to 0.33 percent of the gross customer assets. The bank carries a provision of around 23 percent on restructured loans, which is in excess of regulatory limits," said Axis Bank.

Non-interest income (other income) grew by 38.7 percent YoY to Rs 3,588.17 crore in Q1FY22 as the fee income increased 62 percent YoY to Rs 2,668 crore.Pre-provision operating profit at Rs 6,416.04 crore during the quarter ended June 2021 increased by 9.8 percent compared to year-ago period.