Axis Bank net up on interest income

Higher interest income, trading gains drive earnings growth

Axis Bank, the third largest private sector lender in the country, on Thursday said its net profit for the quarter ended June 30 increased by 22 per cent to Rs 1,409 crore. Higher interest income and trading gains aided the bank’s earnings during the quarter. Net interest income, or the difference between interest income and interest expense, grew by 31 per cent from the previous year to Rs 2,865 crore during April-June period. Net interest margin improved 16 basis points sequentially to 3.86 per cent in the first three months of this financial year.

Other income, which comprises of fee, trading profit and miscellaneous income, was up 33 per cent year-on-year. The bank’s trading gains surged 193 per cent to Rs 440 crore during the quarter. Provisions more than doubled from a year ago to Rs 712 crore as asset quality deteriorated in the current uncertain economic environment. Gross non-performing asset ratio increased by four basis points to 1.1 per cent, while net bad loan ratio also deteriorated to 0.35 per cent. The provision coverage ratio was 80 per cent at the end of June.

Its restructured loan portfolio was at Rs 4,211 crore. Advances grew by 16 per cent year-on-year to Rs 198,151 crore driven by 40 per cent rise in retail loans. Deposits were at Rs 238,441 crore, up seven per cent from a year ago. On a daily average basis, low-cost current account savings account deposits rose 17 per cent and constituted 39 per cent of total deposits.

The capital adequacy ratio of the bank was 15.87 per cent while tier I capital ratio was 11.72 per cent as per Basel -III norms.

Axis Bank shares on Thursday ended at Rs 1,241.80 on the NSE up four per cent from previous close.