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Axis Bank reported a 4 per cent growth in its December quarter net profit, supported by 14 per cent loan growth and a 5 per cent increase in net interest income. Retail loans grew moderately while small business lending surged, reflecting a recalibration of the loan book. Asset quality remained stable despite a rise in slippages, and gross NPAs improved. Other income rose, and the bank maintained disciplined expense management aided by technology investments. Capital adequacy stood healthy at 16.55 per cent, positioning the bank for steady, sustainable growth in the coming quarters.
Axis Bank reported a 4 per cent rise in its net profit for the December quarter, reaching INR 7,010.65 crore compared with INR 6,742.99 crore in the same period last year. On a standalone basis, the lender's net profit for the October-December period increased to INR 6,489.57 crore from INR 6,303.77 crore a year earlier. Advertisement
The bank's core net interest income grew 5 per cent to INR 14,287 crore, supported by a 14 per cent growth in loans, although the net interest margin was slightly compressed by 0.29 per cent to 3.64 per cent. Axis Bank's CEO and MD Amitabh Chaudhry indicated that the bank continues to aim for sustainable growth that outpaces the broader system.
Retail loans expanded by 6 per cent year-on-year during the quarter, while lending to small businesses rose by 22 per cent, contributing to the overall strong loan growth. The management highlighted that the slower retail loan growth was part of an ongoing recalibration of the loan book. Retail disbursements, however, grew by over 20 per cent, and the bank expects faster retail loan growth over the next three quarters if the trend continues.
The net interest margin is expected to face additional pressure due to the Reserve Bank's December rate cut, with the bank anticipating further compression in upcoming quarters, according to CFO Puneet Sharma.
In terms of asset quality, new slippages increased to INR 6,003 crore from INR 5,432 crore a year earlier and INR 5,696 crore in the previous quarter. These included INR 1,698 crore in technical impacts for the third consecutive quarter. Sharma expressed confidence that asset quality has stabilised and emphasized that improvements in credit costs indicate a stronger underlying position. The gross non-performing assets (GNPA) ratio improved to 1.40 per cent from 1.46 per cent in the previous quarter, while total provisions rose to INR 2,245.92 crore from INR 2,155.63 crore a year ago.
Other income increased to INR 6,226 crore from INR 5,972 crore in the year-ago period. Sharma noted that, unlike its peers affected by the new labour codes, the bank had to provide only INR 25 crore in the quarter as it had already been allocating funds for employee social security since 2020. He also added that the bank has maintained better control on expenses through investments in technology, improved productivity, higher employee utilization, and a reduced workforce.
The bank's capital adequacy ratio stood at 16.55 per cent as of the end of December.
Source PTI
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