Axis Bank Q2 Results: PAT Jumps 10% To Rs 5,864 Crore, Asset Quality Improves Further; NII Up 19%

Private sector lender, Axis Bank reported a 10.01% growth in net profit to Rs 5,863.56 crore in the quarter ending September 2023 (Q2FY24, as against Rs 5,329.77 crore in the same period a year ago. In the quarter, Axis Bank reported double-digit growth in interest income and operating profit, while its asset quality continued to improve. The lender also saw a substantial drop in provisions sequentially.

In the June 2023 quarter, the net profit was at Rs 5,797.10 crore.

While the bank's operating profit for the quarter grew 12% YoY to Rs 8,632 crore. Core Operating profit for Q2FY24 grew 12% YoY and 5% QoQ to Rs 8,733 crore.

Net interest income (NII) , which is the difference between interest earned and expended, came in at Rs 12,315 crore, registering a growth of 19% YoY and 3% QoQ . Net interest margins (NIM) were up by 15 bps YoY and 1 bps QoQ to come at 4.11% in the quarter under review.

Furthermore, the bank's provisions stood at Rs 815 crore in the quarter. Also, specific loan loss provisions for Q2FY24 stood at Rs 1,010 crore. Notably, the Bank has not utilized Covid provisions during the quarter. The Bank holds cumulative provisions (standard + additional other than NPA) of Rs 11,758 crore at the end of Q2FY24.

It said, "It is pertinent to note that this is over and above the NPA provisioning included in our PCR calculations. These cumulative provisions translate to a standard asset coverage of 1.32% as of 30th September 2023. On an aggregated basis, our provision coverage ratio (including specific + standard + additional + Covid provisions) stands at 150% of GNPA as of 30th September 2023. Credit cost for the quarter ended 30th September 2023 stood at 0.42%."

In terms of asset quality, the bank's gross NPA stood at 1.73% in Q2FY24, declining by 77 bps YoY and 23 bps QoQ , while net NPA was at 0.36% down 15 bps YoY and 5 bps QoQ . In the quarter, the bank's gross slippage ratio (annualized) was at 1.49%, lower by 39 bps YoY, and the net slippage ratio (annualized) came in at 0.59%.

Under the balance sheet, as of September 30, 2023, it grew 13% YoY and stood at Rs 13,38,914 crore.

Total deposits grew 18% YoY and 1% QoQ on a period end basis, within which savings account deposits grew 16% YoY, current account deposits grew 7% YoY; total term deposits grew 22% YoY and 4% QoQ of which retail term deposits grew 15% YoY and 4% QoQ . The share of CASA deposits in total deposits stood at 44%. On a QAB basis, total deposits grew 16% YoY and 1% QoQ , within which savings account deposits grew 17% YoY and 1% QoQ , current account deposits grew 11% YoY, and total term deposits grew 17% YoY and 3% QoQ .

And the advances grew 23% YoY and 5% QoQ to Rs 8,97,347 crore by the end of Q2FY24.

Under advances, in Q2FY24, domestic net loans grew 26% YoY and 5% QoQ . Retail loans grew 23% YoY and 4% QoQ to Rs 5,19,736 crore and accounted for 58% of the net advances of the Bank. The share of secured retail loans was ~ 76%, with home loans comprising 31% of the retail book. Home loans grew 9% YoY, Personal loans grew 25% YoY, Credit card advances grew 72% YoY, Small Business Banking (SBB) grew 42% YoY and 9% QoQ , and rural loan portfolio grew 24% YoY and 4% QoQ .

Furthermore, SME book remains well diversified across geographies and sectors, growing 27% YoY and 9% QoQ to Rs 95,954 crore. Corporate loan books grew 21% YoY and 3% QoQ to Rs 2,81,657 crore of which domestic corporate books grew 33% YoY and 4% QoQ . Mid-corporate book grew 37% YoY and 9% QoQ . 89% of the corporate book is now rated A- and above with 89% of incremental sanctions in H1FY24 being to corporates rated A- and above.

In payments and digital, Axis Bank issued 1.2 million new credit cards in Q2FY24. The Bank has been one of the highest credit card issuers in the country over the last seven quarters and has gained an incremental CIF market share of 15% in the last twelve months. The Bank continues to remain among the top players in the Retail Digital banking space.

During the quarter, the Bank added 207 branches taking its overall distribution network to 5,152 domestic branches and extension counters situated across 2,864 centres compared to 4,760 domestic branches and extension counters situated across 2,676 centres as of September 2022. As of September 2023, the Bank had 15,806 ATMs and cash recyclers spread across the country. The Bank's Axis Virtual Centre is present across six centres with over 1,500 Virtual Relationship Managers as on 30th September 2023