Axis Bank Q4 net up 71%

Axis Bank today reported a 70.56 per cent increase in net profit during the fourth quarter of 2006-07 to Rs 361.4 crore mainly due to a steady rise in interest and fee income.

The private bank announced a dividend of 60 per cent for the year ended March 2008. The diluted earnings per share (EPS) were at Rs 31.31 compared with Rs 22.79 at the end of March 2007.

During 2007-08, the bank¡¯s net profit rose 62.52 per cent to Rs 1,071.03 crore as against Rs 659.03 crore during the previous financial year. The private bank ended the last financial year with a capital adequacy ratio of 13.73 per cent compared with 11.57 per cent in 2006-07.

The increase in profits during the fourth quarter is despite non-tax provisions more than doubling to Rs 164.22 crore on account of provision of Rs 72 crore for mark-to-market losses on six derivatives transactions and a Rs 20 crore provision for depreciation in its credit-linked notes portfolio. 
  

RESULTS AT A GLANCE
In Rs crore	Q4 FY 2007-08	Y-o-Y % chg	FY 2007-08	Y-o-Y % chg
Net profit	361.4	^ 70.56	1,071.03	^62.52
Net interest income	828.43	^ 88.72	2,585.35	^76.07
Fee income	415.32	^ 67.16	1,320.70	^69.55
Net interest margin (%)	3.93	^from 2.89	3.47	^from 2.74
Cost of funds (%)	5.82	from 5.92	6.02	^from 5.60
Demand deposits	40,027	^ 70.84	40,027	^70.84
CAR (%)	13.73	^from 11.57	13.73	^from 11.57

The bank¡¯s interest income soared 89 per cent to Rs 828.43 crore during the fourth quarter of 2007-08 as net interest margins went up to 3.93 per cent during January-March this year compared with 2.89 per cent in the same period last year.

The rise was attributed to an increase in yield on advances and lower cost of funds, thanks to the focus on current and savings account (CASA) deposits. Axis Bank Chairman P J Nayak said the bank would be happy with an NIM (net interest margin) of 3.5 per cent to 4 per cent. ¡°There is no virtue in being at the upper end of the band. But it will depend on how we fare on CASA,¡± he said.

The bank¡¯s total deposits rose 49 per cent to Rs 87,626 crore, while CASA resources grew 71 per cent to Rs 40,027 crore.

At a time when the industry saw 21 per cent growth in advances, Axis Bank said its net advances rose 62 per cent to Rs 59,662 crore during 2007-08, with retail loans rising 52 per cent to Rs 13,592 crore at the end of March 2008.