Axis Bank Q3 net profit jumps 22%, asset quality improves

Axis Bank, India’s third-biggest private-sector lender, on Monday reported a 22% spike in net profit for the third quarter to Rs 3,614 crore.

Profit for the quarter ended December 2021 was 15% higher than the previous quarter’s earnings.

Operating profit was up 17% on a year-on-year basis and 4% sequentially, the lender said. 

The bank’s balance sheet grew 20% year-on-year to Rs 11,13,066 crore as on December 31. The total deposits grew by 22% year-on-year on quarterly average balance basis and 20% year-on-year on period-end basis.

Axis Bank said its loan book grew across all major segments, with retail lending up by 18% as compared with the same period last year and 6% as against the last quarter. Lending to small businesses and corporates was up 20% and 13%, respectively, as compared with the year-ago period. 

Axis Bank said it saw credit card spends during the quarter spike 52% as compared with the same period last year, while the figure was up 22% if looked at sequentially. 

Other key highlights

1) Net Interest Income up 17% year-on-year and 10% quarter-on-quarter.

2) Fee income up 15% year-on-year and 3% quarter-on-quarter.

3) Total deposits grew 22% year-on-year and 3% quarter-on-quarter. 

4) Loans up 17% year-on-year and 7% quarter-on-quarter.

5) Lending to small and medium enterprises up 20% year-on-year and 9% quarter-on-quarter.

6) Corporate lending up 13% year-on-year and 7% quarter-on-quarter 

7) Gross NPAs were at 3.17%, down 138 bps on a year-on-year basis and 36 bps quarter-on-quarter.

8) Net NPAs were at 0.91%, down 28 bps year-on-year and 17 bps quarter-on-quarter.

9) More than 0.77 million credit cards issued in Q3FY22, highest ever for any quarter.

10) Axis AMC’s nine-month FY22 profit after tax grew 54% year-on-year to Rs 252 crores, and assets under management were up 43% year-on-year.

11) Axis Finance nine-month profit grew 81% to Rs 251 crore.

12) Axis Capital nine-month profit stood at Rs 166 crore, up 88% year-on-year.

13) Axis Securities nine-month profit at Rs 174 crores, up 48% on a year-on-year basis.

Management commentary

Amitabh Chaudhry, MD and CEO, Axis Bank, said that as part of its digital strategy, the bank continues to focus on ‘OPEN’ Banking initiatives to enhance user experience through constant innovation in offerings to both retail and corporate banking customers.

“In retail, we continue our growth focus, with the economy turning around and limited impact of the virus. We are optimistic about the future and plan to leverage every sustainable growth opportunity that is available to us,” he added. 

Axis Bank said it had not utilized Covid-19 provisions during the quarter. The bank said that it holds cumulative provisions of Rs 13,404 crores at the end of Q3FY22.

“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 2.03% as on December 31, 2021,” Axis Bank said. “On an aggregated basis, our provision coverage ratio stands at 130% of GNPA as on 31st December, 2021,” it said.