Axis Bank Q2 net profit rises 77%

Axis Bank Q2 net profit rises 77%
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First Published: Mon, Oct 13 2008. 10 15 PM IST
Updated: Mon, Oct 13 2008. 10 15 PM IST
Mumbai: Robust growth in low-cost deposits and fee-based income helped private sector lender Axis Bank Ltd post 76.8% growth in net profit for the quarter ended 30 September. The bank’s shares surged 19% on Monday, the most in more than five years, as the stock market rebounded.
Net profit, which beat analyst estimates, rose to Rs402.91 crore in the fiscal second quarter, from Rs227.82 crore in the year-ago period, the bank said. Interest and non-interest income combined rose to Rs3,239.45 crore from Rs2,059.37 crore.
Fee income jumped 91% to Rs626.77 crore from Rs327.65 crore. Axis Bank’s current and savings account deposits rose 36% and 49% year on year, respectively.
Axis Bank, formerly known as UTI Bank Ltd, announced the earnings against the backdrop of turmoil in global markets caused by concerns over a spreading credit crunch and slowing economic growth.
The lender reported little fallout on its second quarter numbers, with its profit beating the Rs342 crore median estimate of three analysts surveyed by Bloomberg. Net advances grew 54% year on year while its retail loan portfolio alone grew by 55%, the bank said.
Operating profit and net interest income surged 89% and 55%, respectively, to Rs874.43 crore and Rs913.47 crore. During the period, the bank’s balance sheet grew 53% year on year to Rs127,786.39 crore, from Rs83,548.88 crore a year earlier. Net non-performing assets fell to 0.43% of advances from 0.55%.
Axis Bank had a capital adequacy ratio of 12.2% as of 30 September, down from 17.59% in the corresponding period of the last fiscal, but still more than the regulatory minimum.
The bank’s shares rose Rs107.35, or 19.43%, to Rs659.95 as the Bombay Stock Exchange’s key index, the Sensex, gained more than 7% after last week’s pounding by investors.
ICICI Bank Ltd, the lender with the biggest losses on overseas investments, climbed by a record 17% to Rs425.15 after CEO K.V. Kamath said the bank has sufficient funds. The shares had fallen by a record 20% on Friday.
The lender is being targeted by short-sellers who have spread rumours that ICICI Bank may struggle to refund depositors, Kamath said. The stock has slumped 35% in a month.
Meanwhile, Axis Bank is planning to float an asset management company, or AMC, with Banque Privee Edmond de Rothschild Europe, part of the LCF Rothschild Group, executive director Asok Kumar said.
“The AMC will provide investment advisory services for private banking and wealth management in India,” said Kumar, adding that the venture is subject to approval from the Reserve Bank of India and the Securities and Exchange Board of India.
Bloomberg and Mint’s Anita Bhoir contributed to this story.
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First Published: Mon, Oct 13 2008. 10 15 PM IST