Axis Bank beats street estimates with 54% jump in Q4 profit

Axis Bank posted better-than-expected profit for the quarter ended March 31, 2022 as lower provisions helped it push up margins during the last three months of the financial year.

The bank posted a net profit of Rs 4,117.8 crore, up 54% from Rs 2,677 crore in the same quarter a year ago. Analysts were expecting profit to grow around 40-45% year on year.

Operating profit for the quarter grew 13% year on year and 5% quarter on quarter to Rs 6,466 crore.

Meanwhile, its net interest income grew 17% year on year and 2% sequentially to Rs 8,819 crore. Net interest margin for Q4 FY22 stood at 3.49%.

Other Key Highlights

1) Gross NPA at 2.82% declined by 88 bps YoY and 35 bps QoQ.

2) Net NPA at 0.73% declined 32 bps YoY and 18 bps QoQ.

3) Specific loan loss provisions for Q4 FY22 were Rs 602 crore, compared with Rs 790 crore in Q3 FY22.

4) Credit cost for the quarter end stood at 0.32%, declining by 116 bps YoY and 12 bps QoQ.

5) Fee income for the quarter grew 11% YoY and 12% QoQ to Rs 3,758 crore.

6) Retail fees grew 14% YoY and 14% QoQ; and constituted 66% of the bank’s total fee income.

7) Retail assets (excluding cards) fees grew 41% YoY and 16% QoQ; Corporate and commercial banking fees together grew 7% YoY and 10% QoQ.

8) The bank’s board has recommended a final dividend of Re 1 per share.

Management Commentary

The bank said it has not utilized Covid-19 provisions during the quarter and holds cumulative provisions (standard lus additional other than NPA) of Rs 12,428 crore at the end of Q4 FY22. These cumulative provisions translate to a standard asset coverage of 1.77% as on March 31, 2022. On an aggregated basis, its provision coverage ratio (including specific, standard, additional and Covid provisions) stands at 132% of GNPA as on March 31, 2022.

Amitabh Chaudhry, MD and CEO, Axis Bank said, “We have made steady progress across all dimensions of our business. Considerable work has gone into strengthening our core, building granularity while at the same time ensuring that we are well positioned to grow and leverage the opportunities opening up, hopefully with the pandemic behind us.”

Talking about Axis Bank’s recent purchase of Citibank’s India consumer banking business, he said: “The Citi deal is one of its kind, and should pivot us into a premium franchise in line with our strategic objectives. With smart products, services, partnerships and talent on our side, we look forward to further building on our performance in the new financial year.”

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