Axis Bank net up 25% in Q4; advances grow impressively

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Axis Bank net up 25% in Q4
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Private sector lender, Axis Bank has reported a 25 percent growth in its net profit to Rs 1,277 crore in the fourth quarter of last financial year on the back of strong growth in core earnings.

Net profit of the bank stood at Rs 1,020 crore in the same period last year. Total income of the back rose by 31.47 percent to Rs 7647.9 crore compared to Rs 5817 crore reported in the same period last year.

"Overall, fourth quarter and the last financial year were good for the bank as we have seen sound growth in both net profit and total income," Managing Director and Chief Executive of Axis Bank Shikha Sharma told reporters here. Net interest income (NII) of the bank rose by 26.17 percent to Rs 2,146.09 crore compared to Rs 1,701 crore reported a year earlier.

The bank's total growth in advances for the FY12 stood at 19 percent and it remained confident of exceeding industry average in the ongoing fiscal as well. "We should be able to grow ahead of the industry.

So, if RBI predictions for loan growth is 17 percent, we should be able to grow faster than that. And we expect retail segment to grow faster than the overall growth," Sharma said. On the net interest margin (NIM) front, the bank has been able to stretch it to 3.55 percent over the year ago period's 3.44 percent. However, when compared sequentially, it slipped from 3.75 percent registered in the earlier quarter.

"Margins have contracted because of two things. One is the fact that the cost of funds have gone up. And the other is we do generally tend to lend to priority sector toward the fourth quarter which suppressed yields," its executive director and chief financial officer Somnath Sengupta told reporters here. The percentage of the low-cost current and savings account deposits (CASA) stood at 42 percent as on March 31, 2012. Axis Bank's total capital adequacy stood at 13.66 percent as on March 31, with the core tier-I constituting 9.45 percent.

Sharma said the bank is healthily capitalised and will not go in for any infusion for the next 16 to 19 months. During the quarter under review, Axis Bank's fee income rose only 8 percent due to a 1 percent growth in fees from large and mid corporate segment and a decline in treasury, debt capital markets and equity capital markets verticals given the slowdown in economic activity.

On the asset quality front, the bank was able to get down its gross non performing assets to Rs 1,806 crore as on March 31, 2012 versus December 31, 2011s' Rs 1,915 crore.

During the March quarter, it added Rs 514 crore to its gross non performing assets during the quarter, while recovery and upgrades stood at Rs 593 crore and Rs 30 crore had to be written-off. Loans aggregating to Rs 588 crore were restructured during the quarter, taking the total restructured assets during FY12 to Rs 3,060 crore.

On the sectoral front, the bank's exposure to the textiles sector--whose demand for a Rs 1 trillion debt restructuring has been turned down by the Reserve Bank, stood at 16 percent of the book while the same to the troubled microfinance sector was at 8 percent. When asked about reports of the bank planning to sell off its private equity business, Sharma said there is no such plan at present.


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