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MUMBAI : Private sector lender Axis Bank on Monday reported a year-on-year (y-o-y) trebling of its net profit to 3,614 crore in the December quarter of FY22 on the back of higher income and lower provisions.

The bank’s total provisions and contingencies stood at 1,335 crore, down 64% y-o-y. The bank reported a total income of 21,101 crore for the three months ended 31 December, 15% more than the same period last year.

Axis Bank’s net interest income (NII) -- difference between interest earned and interest expended -- increased 17% y-o-y to 8,653 crore and its net interest margin (NIM) – a key measure of profitability – stood at 3.53%, an increase of 14 basis points (bps) sequentially. Axis Bank’s other income, which includes fee, trading profit and miscellaneous income, grew 31% y-o-y to 3,840 crore in the three months to December.

The bank’s gross non-performing assets (NPAs) ratio –bad loans as a percentage of gross advances -- were at 3.17% in Q3 FY22, down 36 bps sequentially and 27 bps y-o-y. Post-provisions, the net NPA ratio was at 0.91% in Q3, against 1.08% in the September quarter of FY22 and 0.74% in the year-ago quarter.

 “As we look forward in terms of our overall credit performance, we do expect the moderation to continue on credit cost as lumpy wholesale exposure are behind us" said Puneet Sharma, chief financial officer, Axis Bank.

Amitabh Chaudhry, chief executive, Axis Bank said that over the past few years, the bank has created right provisions, taken upfront covid-related hit by not giving too much of ECLGS loans or even restructuring. “This is reflected in improvement in the asset quality," said Chaudhry.

Launched on 20 May 2020, ECLGS provides 100% guarantee coverage to select borrowers, and while it was originally devised for small business borrowers with total fund-based credit outstanding of up to 25 crore, it now includes other segments as well.

The bank’s gross slippages in Q3 FY22 stood at 4,147 crore as compared to 5,464 crore during Q2 and 7,993 crore in Q3FY21. Slippages from the loan book were at 3,332 crore and that from investment exposures stood at 815 crore. Its recoveries and upgrades from NPAs during the quarter were 3,288 crore, while write-offs were at 1,707 crore.

Axis Bank’s advances grew 17% y-o-y 6.64 trillion as on 31 December. Retail loans grew 18% y-o-y to 3.67 trillion and accounted for 55% of the net advances of the bank. The share of secured retail loans was at 80%, with home loans constituted 37% of the retail book. The bank’s corporate loan book grew 13% y-o-y to 2.29 trillion.

“Mortgages is the largest (among retail loan segments). But small business banking has grown strongly and personal loans started showing growth on sequential basis. Auto loans growth is restricted due to supply side issues," said Sumit Bali, group executive and head of retail lending at Axis Bank.

On Monday, shares of the bank fell 1.16%% to close at 704.35 on the BSE.

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