Private lender Axis Bank on Thursday reported a net profit of R1,604.11 crore for the quarter ended December 31, up 19% on a year-on-year (y-o-y) basis. Net profit was boosted by a net interest income of R2,984.01 crore, up 19.61% y-o-y. Lower provisioning during Q3 and lending against foreign currency non-resident (FCNR) deposits also helped the net rise.
Operating profit stood at R2,615.03 crore, up 10.74% from a year ago, while its other income grew 1.80% y-o-y to R1,644.42 crore. Net interest margins (NIMs) stood at 3.71%, down 8 basis points (bps) from the preceding quarter.
Somanth Sengupta, executive director at Axis Bank, said the impact of the lending against FCNR deposits had an impact of 6 bps on NIMs. The bank had raised $1.57 billion via RBI?s special swap window for FCNR deposits which ended November 30.
?Our overall guidance on margins is that we would like to keep it above 3.5% for the year. As the capital we have raised gets utilised there will be some shrinkage in the margin but over the year it will be above 3.5%,? Sengupta added.
Gross and net non-performing assets (NPAs) as a percentage of total advances rose to 1.25% and 0.42%, respectively, against 1.19% and 0.37%, respectively, in the September quarter. In absolute terms, gross NPAs rose 32.21% y-o-y to R3,008.20 crore while net NPAs in the Q3 rose 47.84% y-o-y to R1,003.43 crore.
Slippages stood at R589 crore and restructured advances were R4,900 crore, or 2.06%, of net customer assets. Recoveries and upgrades were R122 crore and write-offs were R193 crore. Sengupta said that R670 crore worth restructured loans was added in Q3 and said that the bank would see about 20-25% of restructured advances slip into NPAs.
Provisions at R202.49 crore from R386.83 crore in Q2.
Advances grew 18% y-o-y to R2,11,467 crore and domestic retail advances grew 33% y-o-y to R64,126 crore and accounted for 30% of net advances compared to 27% last year. The SME segment recorded a growth of 25% y-o-y and stood at R31,594 crore.
?Our loans rose from about R1.8 lakh crore to R2.11 lakh crore. The growth would be a little slower than that if you were to take out the lending against the FCNR deposits we have raised. So the real loan growth would be around 15%,? Sengupta explained.
Total deposits grew to R2,62,398 crore, a y-o-y growth of 7.32%, of which savings bank deposits grew 21% y-o-y to R69,627 crore.
