Private sector lender Axis Bank on Tuesday beat Street expectations, reporting a net profit of R1,347 crore for the quarter ended December 31, 2012, up 22% from a year ago. Operating profits during the quarter climbed 15% y-o-y to R2,361.5 crore, driven by an increase in the net interest income (NII) to R2,495 crore, up 17% year-on-year and an increase in the fee income, up 15% y-o-y to R1,405 crore.
The Axis Bank stock rose 2.64 % on the BSE to close at R1,422.45. The bank's net interest margin (NIM) during the quarter rose to 3.57%, up 11 bps sequentially. Somnath Sengupta, executive director, corporate centre, Axis Bank, said the bank hoped to maintain margins at these levels.
Axis Bank reported stable asset quality in the October-December quarter with NPAs marginally lower at 0.33% of total assets compared with 0.39% last year. On a sequential basis, net NPAs remained unchanged.
However the bank restructured Rs 368 crore worth of loans during the quarter, higher than Rs 323 crore worth of assets in the September 2012 quarter. The private sector lender had restructured loans amounting to Rs 295 crore in the corresponding quarter last year.
Provisions and contingencies for the quarter stood at R386.83 crore, lower than R509.42 crore reported last year. This was due to a writeback worth R33 crore the bank received during the quarter due to depreciation in provisions, Sengupta said, adding that the bank’s provision coverage ratio was 81%.
During the quarter, other income grew 13% y-o-y to R615 crore, driven by growth in fees, which stood at R405 crore, up 15% from the corresponding period last year. Total income stood at R8,580 crore, up 19% from a year ago.
The bank's retail advances rose 45% y-o-y to R48,068 crore and constitute 27% of the bank's total advances. “This will be our focus area because there is demand and we are able to reach customers through our network,” Sengupta. Axis Bank’s net advances grew 21% y-o-y to reach 1,79,504 crore.
The total deposits of the bank grew 17% year-on-year to R2,44,501 crore.