Axis Bank Q4 net rises 54% at Rs 4,118 cr; net interest income up 17%

Provisioning dropped to Rs 987 cr, down from Rs 2,167 cr during the same period of the previous year

Axis Bank – the third largest private sector lender of the country — reported a 54 per cent on-year growth to Rs 4,118 crore in its net profit for the Jan-March quarter on the back of healthy growth in core income and lower provisions.

Net interest income of the bank grew 17 per cent on year to Rs 8,819 crore, while net interest margin (NIM) for Q4FY22 stood at 3.49 per cent. Fee income for Q4FY22 grew 11 per cent on year to Rs 3,758 crore.

Overall provisioning dropped to Rs 987 crore during the period under review, sharply down from Rs 2,167 crore during the same period of the previous year. Specific loan loss provisions for Q4FY22 were Rs 602 crore, the bank said.

Gross non-performing assets were 2.82 per cent of gross advances, which declined by 88 bps on year and 35 bps sequentially. Net NPA was at 0.73 per cent declined 32 bps on-year and 18 bps from the previous quarter.

Fresh slippages were Rs 3,981 crore during the quarter, as compared to Rs 5,285 crore during the same period of the previous year. Accounting for Rs 3,763 crore of recoveries and upgrades, net slippages were only Rs 218 crore. Over two-thirds of the fresh slippages were from the retail loans.

“Fifty-four per cent of our slippages were upgraded in the same quarter. The net slippages of Rs 218 crore for the quarter and 0.13 per cent annualised, won’t troubles us, even if we assume all of it are coming from retail,” said Puneet Sharma, chief financial officer, Axis Bank.

“When you look at our provisioning policies around retail products, we create 100 per cent provision early in the cycle of NPA slippage,” Sharma said.

Commenting on the attrition rate for Axis Bank in the last financial year — FY23 — Amitabh Chaudhry, MD & CEO, said the attrition had gone up for the bank, as well as the industry and said this was an area where the bank had to work on because losing employee has a cost.

“We had two years of Covid and the attrition rate for the entire economy had come down including the financial services industry. Attrition rate had picked up across the entire economy in the last financial year. We are no exception to that. So our attrition rates have gone up. I think, the banks we compare to, attrition rate – both at the front end and in the corporate – is similar,” Chaudhry said. 

“Yes fully understand that this is something we need to continuously work on because losing any employee has a cost attached to it. You don’t want to lose an employee who worked with the organisation for some time,” he added.