Axis Bank Q3 net up 224% to Rs 3,614 cr on better interest margins

Net Interest Income rose 17% YoY basis to Rs 8,653 crore in Q3FY22. Sequentially, it was up 10%

Private sector lender Axis Bank’s net profit rose 224 per cent to Rs 3,614 crore for the third quarter ended December 2021 (Q3 of FY22) on improvement in net interest margin (NIM) and other income.

Net profit was Rs 1,117 crore in Q3 of FY21. Sequentially, net profit rose by 15 per cent from Rs 3,133 crore in the second quarter ended September 2021. Its stock closed 1.16 per cent lower at Rs 704.35 per share on the BSE on Monday.

Net interest income (NII) rose by 17 per cent year-on-year (YoY) to Rs 8,653 crore in Q3. Sequentially, NII grew by 10 per cent from Rs 7,901 crore in Q2.

NIM rose by two-basis points (bps) YoY at 3.53 per cent in Q3. Sequentially, rise in NIM was 14 bps over Q2 of FY22.

NII rose 31.14 per cent to Rs 3,840 crore in Q3 of FY22 from Rs 2,928 crore in Q3 of FY21. Sequentially, it rose marginally from Rs 3,798 crore in the quarter ended September 2021 (Q2).

Gross advances grew by 17 per cent (YoY) to Rs 6.64 trillion in Q3 as against Rs 5.69 crore in the same quarter of FY21. Retail credit rose 18 per cent YoY and small and medium enterprises (SME) credit by 20 per cent.

Amitabh Chaudhry, managing director and chief executive, said the outlook is positive and the bank expects to grow its loan book at 5-6 per cent higher than the banking industry growth.

Commercial bank credit rose by 9.2 per cent (YoY) at the end of December 2021, according to Reserve Bank of India (RBI) data.

Total deposits increased by 20 per cent to Rs 7.71 trillion in Q3 of FY22 from Rs 6.41 trillion a year ago. Provisions declined sharply at Rs 1,337 crore in Q3, from Rs 3,757 crore in the third quarter of FY21.

Sequentially also, provisions were down from Rs 1,735 crore in Q2 of FY22.

Bank officials — in a media call — said moderation in credit costs and amounts set aside as provisions are expected to continue. 

Provision coverage ratio (PCR) stood at 89 per cent in December 2021 up from 87 per cent a year ago and 88 per cent as of September 2021.

According to a filing with the BSE, gross non-performing assets (gross NPAs) declined to 3.17 per cent in December 2021 from 3.44 per cent in December 2020 and 3.53 per cent in September 2021.

Net NPAs stood at 0.91 per cent in December 2021 from 0.74 per cent a year ago. But they declined from 1.08 per cent in September 2021.