Axis Bank Recommends 50% Dividend, PAT Up 68% YOY

This bluechip large private lender, Axis Bank has declared a dividend of 50% for the financial year ended March 31, 2023 along with the Q4FY23 results. The company posted a profit after tax (PAT) of Rs 21,933 crores, up 68 per cent year on year.

In the statement released by Axis Bank, it has posted a core operating profit growth of 46% year on year (YOY) to Rs 9,084 crores while the operating profit grew 42 per cent to Rs 9,168 crore. The net profit (excluding exceptional items) is at Rs 6,625 crores in Q4FY23 grown by 61% YOY and 13% quarter on quarter (QOQ).

The bank made prudent accounting choices in relation to one-time non-recurring items aggregating to Rs 12,490 crores comprising of full amortisation of Intangibles and Goodwill which is equal to the value of purchase consideration paid/payable on the acquisition of Citibank India Consumer Business. The bank charged the acquisition completely to the Profit & Loss account, to deal with the impact of policy harmonization on operating expenses and provisions; and its one-time stamp duty on the acquisition. These have been charged to the Profit and Loss Account in Q4FY23 and reported as Exceptional Items.

The bank recorded a net loss of Rs 5,728 crores for Q4FY23 over previous quarter. The Bank's Net Interest Income (NII) grew 33% YOY and 2% QOQ to 11,742 crores. Net interest margin (NIM) for Q4FY23 stood at 4.22%, up 73 bps YOY.

Full year performance
Net Interest Income for FY23 grew 30% YOY to Rs 42,946 crores from Rs 33,132 crores. Fee income grew 25% YOY to Rs16,216 crores. Core operating profit in FY23 grew 40% YOY to Rs 32,291 crores from Rs 23,094 crores. Operating profit in FY23 grew 30% YOY to Rs 32,048 crores from Rs 24,742 crores. Total provisions for FY23 stood at 2,653 crores, down 64% over the
same period last fiscal. Net Profit for FY23 (excluding exceptional items) grew 68% to Rs 21,933 crores from Rs 13,025 crores in FY22. Reported net profit for FY23 de-grew by 26% YOY to Rs 9,580 crores.

Savings and loan details
The Bank's balance sheet grew 12% YOY and stood at Rs 13,17,326 crores as on 31 st March 2023. The total deposits grew 15% YOY and 12% QOQ on period end basis. The share of CASA deposits in total deposits stood at 47%, up 215 bps YOY and 261 bps QOQ.

The Bank's advances grew 19% YOY and 11% QOQ to 8,45,303 crores as on 31 st March 2023. Domestic net loans grew 23% YOY and 13% QOQ. Retail loans grew 22% YOY and 14% QOQ to 4,87,571 crores and accounted for 58% of the net advances of the Bank.

The share of secured retail loans was approximately78%, with home loans comprising 32% of the retail book. Home loans grew 10% YOY, Small Business Banking (SBB) grew 50% YOY and 12% QOQ; and rural loan portfolio grew 26% YOY and 19% QOQ. Unsecured personal loans grew 21% YOY and 8% QOQ.

Credit Card advances grew 97% YOY. SME book remains well diversified across geographies and sectors, grew 23% YOY and 13% QOQ to Rs 92,723 crores. Corporate loan book grew 14% YOY and 6% QOQ to 2,65,009 crores of which domestic corporate book grew 24% YOY and 11% QOQ. Mid-corporate book grew 38% YOY and 10% QOQ. 89% of corporate book is now rated A- and above with 89% of incremental sanctions in FY23 being to corporates rated A- and above.

Non performing assets (NPA) and adequacy ratio
GNPA at 2.02% declined by 80 bps YOY & 36 bps QOQ, NNPA at 0.39% declined 34 bps YOY & 8 bps QOQ o PCR healthy at 81%; On an aggregated basis5 , Coverage ratio at 145% Q4FY23 gross slippage ratio (annualized) at 1.76%, declined 62 bps YOY & 27 bps QoQ, net slippage ratio at 0.38%, declining 55 bps QoQ.

The Capital Adequacy Ratio (CAR) and CET1 ratio was 17.64% and 14.02% respectively. Additionally, the Bank held Rs 5,012 crores of COVID provisions, not considered for CAR calculation, providing cushion of 51 bps over the reported CAR.

The Bank now has a self-sustaining capital structure to fund growth, with net capital accretion (excluding exceptional items) through profits to CET-1 of 69 bps for the FY23. The Book value per equity share increased from Rs 375 as of 31st March, 2022 to Rs 406 as of 31st March, 2023

Dividend details
In the meeting held on Thursday, the board of directors recommended a final dividend of Re 1 per equity share of face value of Rs 2 each (50%) for the financial year ended March 31, 2023. The divided announced is subject to approval of the members of the bank at the ensuing 29th Annual General Meeting (AGM).

Share price movement
The price of Axis Bank stock closed at Rs 881.05 per share, it was down by 0.76 % over previous day's closing. In last one year it has moved up by 15% while in three years it has skyroketed by 105.04%.