Home / Companies / Company Results /  Axis Bank Q3 net jumps 62% on interest income

Mumbai: Axis Bank on Monday reported a 62% surge in fiscal third quarter net profit as the private lender benefited from higher net interest income.

Profit in the three months ended 31 December climbed to 5,853 crore from 3,614 crore a year earlier. The figure surpassed the 5,342 consensus estimate in a Bloomberg survey of 49 analysts.

Total provisions and contingencies stood at 1,438 crore, up 7.7% from the previous year. December quarter provisions, Axis Bank said, included 340 crore set aside as a one-time provision.

The bank said it has not utilized covid-19 provisions during the quarter and held cumulative provisions of 5,012 crore at the end of Q3FY23.

Axis Bank’s net interest income (NII)—the difference between interest earned and interest expended—jumped 32% from a year earlier to 11,459 crore and net interest margin (NIM)—a key measure of profitability—stood at 4.26%, an increase of 30 basis points (bps) sequentially.

“We are gaining market share in our focus segments. We delivered strong and balanced growth in domestic advances led by market share gains in Bharat (rural) and small and medium enterprise (SME) segments. We got better on granular and premium deposits. Our credit card business has delivered an industry-leading performance," Amitabh Chaudhry, chief executive, Axis Bank, told reporters.

The bank’s gross non-performing asset (NPA) ratio–-bad loans as a percentage of gross advances—stood at 2.38% in Q3FY23, falling 12 bps sequentially and 79 bps from a year earlier. Post provisions, the net NPA ratio was at 0.47% in Q3, down 4 bps sequentially and 44 bps from a year ago.

“Our customer acquisition remains strong. In Q3, we added 2.9 million new customer accounts, a growth of 34% year-on-year 3% quarter-on-quarter. During the quarter, we crossed the milestone of 3 million cards in force of Flipkart-Axis Bank credit card, making it one of the fastest growing co-branded credit cards in the country," Chaudhry said.

The bank’s gross slippages in Q3FY23 stood at 3,807 crore, compared with 3,383 crore in Q2FY23 and 4,147 crore in Q3FY22. Recoveries and upgrades from bad loans during the quarter were at 2,088 crore. Net slippages in NPAs (before write-offs) for the quarter was at 1,719 crore as compared with 557 crore in Q2FY23 and 860 crore in Q3FY22.

Axis Bank’s net advances grew 15% from a year earlier and 4% sequentially to 7.62 trillion as of 31 December. Total deposits grew 9% from a year ago and 2% sequentially on quarterly average balance (QAB) basis; and 10% from a year ago and 5% sequentially on period-end basis.

“We are seeing a broad-based growth in corporate loan demand. There is strong activity in segments such as renewables, roads, chemicals, urban energy distribution, commercial real estate and healthcare," Chaudhry said, adding that capacity expansion projects are picking up, especially in consumption-driven sectors.

Pricing of loans, he said, has also improved compared with what was seen two or three quarters ago.

On Monday, shares of Axis Bank rose 0.28% to close at 933.35 on the BSE in line with a 0.53% rise in the benchmark index Sensex.



Shayan Ghosh

Shayan Ghosh is a national writer at Mint reporting on traditional banks and shadow banks. He has over a decade of experience in financial journalism. Based in Mint’s Mumbai bureau since 2018, he tracks interest rate movements and its impact on companies and the broader economy. His interests also include the distressed debt market, especially as India’s bankruptcy law attempts recoveries of billions worth of toxic assets.
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