Axis Bank, India’s third largest private sector lender, saw its net profit jump 70 per cent in the quarter ended June 2009 to Rs 562.04 as against Rs 330 crore in the year-ago period. A big contributor to the bottom line was profit from treasury operations which grew more than five-fold to Rs 326.07 crore on a year-on-year basis.
“All the businesses we had hoped would perform well, did so. Our cost of funds came down, we did well on the CASA (current account-savings account) as well as other income fronts, including treasury,” Somnath Sengupta, president, finance and accounts, Axis Bank, said.
| FIRST QUARTER SCORECARD | ||
| For the quarter ended 30 June'09 | For the quarter ended 30 June '08 | |
| Net profit (in Rs crore) | 562.04 | 330.14 |
| Net interest income (in Rs crore) | 1045.63 | 810.46 |
| Net interest margin (in %) | 3.34 | 3.37 |
| Total income (in Rs crore) | 3864.13 | 2891.24 |
| Low-cost deposits (in %) | 40.00 | 39.84 |
| Net NPAs (in %) | 0.41 | 0.47 |
| Capital adequacy ratio (in %) | 15.28 | 13.25 |
Net interest income grew by 29 per cent to Rs 1,046 crore in the first quarter of the current financial year from Rs 810 crore last year.
Advances grew by 28 per cent to Rs 78,105 crore in the quarter from Rs 61,160 crore in the year-ago period while total deposits grew 24 per cent to Rs 1,10,256 crore in the same period. The share of low-cost CASA deposits as a percentage of total deposits came down to 40 per cent compared to 43 per cent for the quarter ended March 2009. However, the bank restructured loans worth Rs 995.95 crore during the quarter, taking the cumulative value of assets restructured as of June 30, 2009, to Rs 2,520 crore.
According to Sengupta, a lot of banks will take advantage of the Reserve Bank of India directive allowing loans restructured before June 30, 2009, to be treated as standard assets. “We have got a lot of applications from companies for restructuring of loans,” he added.
Net NPAs as a proportion of net customer assets rose to 0.41 per cent by June 2009-end compared to 0.35 per cent by March 2009-end. Gross NPAs as a proportion of gross customer assets were 1.01 per cent as compared to 0.96 per cent in the year-ago period. The lender managed to halve NPAs on its credit cards portfolio from 15 per cent of total credit card assets in the last quarter to 7.8 per cent.
The bank saw its capital adequacy ratio (CAR), or core capital as a percentage of total risk-weighted assets, rise to of 15.28 per cent at the end of the first quarter as against 13.69 per cent as of March-end.
The bank has got its shareholders’ approval to raise Rs 3,000 of debt through private placements and has already raised Rs 2,000 crore. Sengupta said the lender had no further plans to raise capital in the near future.