Axis Bank Announces Q4 Net Profit at Rs 7,599 Crore Amid Deposit Accretion Worries

Axis Bank, one of India's leading financial institutions, announced a substantial consolidated net profit of Rs 7,599 crore for the quarter ending March 2024. This performance marks a significant turnaround from the loss reported in the same period last year, attributed to the acquisition of Citibank's retail business. On a standalone basis, the bank's net profit stood at Rs 7,130 crore for the January-March quarter, showcasing a robust growth trajectory.

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The bank's financials have shown impressive growth sequentially as well, with net profit increasing by 17% from Rs 6,071 crore in the previous quarter. Over the entire fiscal year 2024, Axis Bank's net profit surged to Rs 24,861.43 crore, up from Rs 9,579.68 crore in the previous year. This remarkable growth is supported by an 11% increase in core net interest income, which reached Rs 13,089 crore during the reporting quarter.

Axis Bank's advances grew by 14%, and its net interest margin expanded slightly by 0.05% to 4.06%. The bank also reported a significant 41% increase in other income to Rs 6,766 crore for the fourth quarter, driven primarily by core fees. Despite these positive developments, the bank's overall deposit growth was at 16%, with a credit-to-deposit ratio exceeding 90%, indicating potential challenges in deposit accretion in the coming fiscal year.

Amitabh Chaudhry, Axis Bank's Managing Director and Chief Executive, expressed concerns about future deposit growth and liquidity constraints. The bank's loan growth was notably led by a 20% increase in the retail segment, complemented by growth in small business and corporate lending.

Corporate Lending and Subsidiary Performance

Rajiv Anand, Deputy Managing Director of Axis Bank, highlighted competitive challenges in corporate lending due to attractive borrowing rates in the bond market. He emphasized looking at corporate sector engagement from a broader fee perspective beyond net interest income (NII). The bank also saw significant growth in unsecured credit, with personal loans and credit card advances growing by 31% and 30%, respectively.

Axis Bank's operational expansion included the addition of 475 branches in FY24, bringing its total network to 5,377 branches across India. The bank's workforce also expanded to over 1.04 lakh employees by March 2024. Its overall capital adequacy ratio stood at a healthy 16.63%, including a core capital buffer of 13.74%.

The bank reported a notable improvement in asset quality, with fresh slippages at Rs 3,375 crore and a gross non-performing asset (NPA) ratio improving to 1.43% as of March 31. Furthermore, Axis Bank witnessed a 22% growth in net profit from its subsidiaries at Rs 1,591 crore for FY24. Among these subsidiaries, Axis Finance saw a 28% growth at Rs 475 crore, while the brokerage business's net profit surged by 48% to Rs 301 crore.

In market performance, Axis Bank's shares closed 0.69% higher at Rs 1,063.70 apiece on the BSE on the reporting day, outperforming the benchmark index's gain of 0.16%. This financial report underscores Axis Bank's resilience and strategic focus on diversified growth avenues amidst challenging market conditions.