Axis Bank Q4 Results: Higher Provisions Weigh On Profit, Asset Quality Improves

Higher provisions and expenses weighed on Axis Bank Ltd.'s standalone net profit for the quarter ended March 31, 2025, according to an exchange filing on Thursday.

The private lender's bottom-line fell 0.1% year-on-year to Rs 7,117.5 crore during the quarter under review. Despite remaining flat, it surpassed the expectations of Rs 6,601 crore of the analysts polled by NDTV Profit.

Provisions and contingencies of the bank rose 15% year-on-year to Rs 1,359 crore

The net interest income grew 6% year-on-year to Rs 13,811 crore. Consequently, net interest margin were at 3.97%, up 4 basis points from a quarter ago.

"We have broken margin improvement into interest reversal and spread. Interest reversal is on the improvement of asset quality sequentially and lower slippages in the quarter, and there was roughly 2 basis points spreads improvement," the bank's management said in a concall.

Asset quality of the bank improved with the gross non performing asset ratio falling to 1.28% from 1.46% a quarter ago. Net NPA ratio of the bank also was down to 0.33% from 0.35% in the December quarter.

This has come as gross slippages fell to Rs 4,805 crore in the March quarter from Rs 5,432 crore in the December quarter. The bank wrote off NPAs worth Rs 3,375 crore in the January-March period, higher than Rs 3,133 crore a quarter ago and Rs 2,082 crore a year ago.

Given the current environment, write-offs were from the retail unsecured segment, the management said.

The lender's net advances rose 8% on-year to Rs 10.4 lakh crore. Retail loans grew 7% to Rs 6.22 lakh crore and accounted for 60% of the net advances of the bank. Home loans grew 1% on year, personal loans rose 8% and credit card advances grew 4%.

Microfinance institution loan book was 2.1% of its retail loans. The management said it remains cautious on this space and will keep it in the same range until when it sees that its suitable.

On slower pace in retail loan growth, the management said that it has been recalibrating this book and as the bank sees early signs of improvement, they will open up lines of acquisitions.

The lender's corporate loan book grew 8%, with domestic corporate loan book increasing by 8% and mid-corporate book by 10%. Around 90% of the bank's corporate book is now rated A- and above.

When asked about the bank's assessment on the recent US tariff announcements, the management said that it has done an "elaborative bottom-up" analysis based on its portfolio. At this point, the bank does not see material issues with the portfolio and will continue to watch the developments on this front.

The bank's deposits during the quarter under review increased by 10% on-year to Rs 11.72 lakh crore. Term deposits rose 14% from last year to Rs 6.94 lakh crore, while current account and savings account deposits accounted for 41% of the deposit portfolio, compared with 39% a quarter ago.

On deposit costs, the management said that the duration of assets and liabilities for the bank is nearly matched and therefore, it will be able to manage any pressure on asset pricing over this period.

Before the quarterly results were declared, shares of Axis Bank closed 0.07% higher at Rs 1207.3 apiece, compared to 0.39% decline in the benchmark Sensex.