With an all-round performance in 2009-10, the bank is geared to benefit from an uptick in the economy.
Axis Bank has wind powering its sails again with a sharp domestic recovery this quarter. Advances grew 28 per cent year-on-year (y-o-y) to Rs 1,04,343 crore as of end-March, as against 17 per cent growth in the non-food credit outlay by scheduled commercial banks.
Net interest income for 2009-10 rose 36 per cent to over Rs 5,000 crore, while it surged 41 per cent to Rs 1,461 crore in the fourth quarter of the current financial year. The income boost, along with 20 per cent growth in fee income in 2009-10, vaulted net profit for the full year by 39 per cent to Rs 2,515 crore, while net profit in the March quarter surged 31.55 per cent to Rs 764.87 crore.
Total deposits grew 17 per cent, parallelling deposit growth in the system, even as current and saving accounts (Casa) grew over 40 per cent y-o-y and demand deposits averaged 42 per cent of the aggregate daily deposits in the March quarter, compared to 35 per cent during the year-ago period.
The Casa boost, coupled with lower cost of term deposits and equity raised last year, pulled up net interest margins (NIMs) by 42 basis points to 3.75 per cent during 2009-10. Gross non-performing assets ratio surged 17 basis points to 1.13 per cent during 2009-10, though it was down 10 basis points from the high of 1.23 per cent during the previous quarter of this financial year.
Going ahead, Axis Bank is targeting balance-sheet growth of 25 per cent in 2010-11, higher than the 20 per cent growth for the system projected by the Reserve Bank of India. Regarding NIMs, the management expects a material correction of 40-50 basis points over the next two quarters, as lending rates are expected to remain soft, while the cost of deposits is likely to creep up.
The double boost of an easy tightening stance by the central bank announced on April 20, together with robust results, has triggered the stock rally. It ended 3.7 per cent higher yesterday at Rs 1,231.05 and trades at 13x FY12 earnings per share estimate.
