Axis Bank Q1 Results: Provisions Double, Asset Quality Worsens

Private sector lender Axis Bank Ltd on Wednesday reported a 4% rise in its net profit, but missed estimates as provisions doubled.

Axis Bank's net profit for the quarter stood at Rs 6,034.64 crore. Analysts polled by Bloomberg estimated a net profit of Rs 6,510 crore for the first quarter.

Net interest income, or the bank's core income, rose 12% year-on-year to Rs 13,448 crore. Other income rose 13.7% from a year ago to Rs 5,783.5 crore.

Overall net interest margin for the quarter stood at 4.05%, remaining flat quarter-on-quarter.

Asset quality for the lender worsened with the gross non-performing asset ratio increasing by 11 basis points sequentially to 1.54%. Net NPA ratio too rose basis quarter-on-quarter to 0.34%.

Fresh slippages during the quarter rose 20% year-on-year to Rs 4,793 crore. The lender upgraded loans worth Rs 1,503 crore, while write-offs during the quarter stood at Rs 2,206 crore. Credit cost rose 51 basis points sequentially to 1.19%.

The lender's provisions were at Rs 2,039 crore in the Apr-Jun quarter, up 97% year-on-year. Specific loan loss provisions for the period stood at Rs 2,551 crore.

The bank’s advances grew 14% year-on-year to Rs 9.8 lakh crore as on June 30. Retail loans grew 18% to Rs 5.85 lakh crore and accounted for 60% of the net advances. Home loans grew 6%, personal loans grew 29%, credit card advances grew 22% and the small business banking portfolio grew 26%.

Corporate loan book grew 10% from a year ago, where domestic corporate loans were up 7%. Mid-corporate loans were up 24% year-on-year.

Total deposits were up 13% from a year ago and stood at Rs 10.62 lakh crore. Low cost current account savings account deposits formed 42% of total deposits.