Private lender Axis Bank on Tuesday reported a 95 percent year-on-year (YoY) jump in standalone net profit at Rs 1,370 crore for the first quarter ended June 2019.
In the corresponding quarter last year, the company posted a net profit of Rs 701.09 crore. CNBC-TV18 Polls had predicted a profit of Rs 1,897.2 crore for the quarter under review.
Axis Bank Q1 results
Total income (standalone) rose to Rs 19,123.71 crore for the June quarter of 2019-20 from Rs 15,702.01 crore in the year-ago period, Axis Bank said in a regulatory filing. There was an uptick in provisioning for bad loans and contingencies at Rs 3,814.58 crore for April-June 2019-20 against Rs 3,337.70 crore in the year-ago period.
The bank’s operating profit for the quarter grew 35 percent YoY to Rs 5,893 crore from Rs 4,372 crore in Q1FY19.
The bank’s net interest income (NII) grew 13 percent YoY to Rs 5,844 crore during Q1FY20 from Rs 5,167 crore in Q1FY19. Net interest margin for Q1FY20 stood at 3.40 percent.
Non-interest income (comprising of fee, trading profit and miscellaneous income) for Q1FY20 grew 32 percent YoY to Rs 3,869 crore as against Rs 2,925 crore during the same period last year. Fee income for Q1FY20 grew 26 percent YoY to Rs 2,663 crore.
The key driver of fee income growth was retail Fee, which grew 28 percent YoY and constituted 62 percent of the bank’s total fee income. Card fees grew strongly by 28 percent YoY.
Transaction banking fees grew 7 percent YoY and constituted 16 percent of the total fee income of the bank. The trading profits for the quarter stood at Rs 832 crore as compared to Rs 103 crore in Q1FY19. Miscellaneous income, for the quarter, stood at Rs 373 crore compared to Rs 705 crore in Q1FY19.
As on June 30 2019, the bank’s gross NPA and net NPA levels were 5.25 percent and 2.04 percent respectively, as against 5.26 percent and 2.06 percent respectively as on March 31, 2019.
The bank has recognised slippages of Rs 4,798 crore during Q1FY20, compared to Rs 3,012 crore in Q4FY19 and Rs 4,337 crore in Q1FY19. Recoveries and upgrades from NPAs during the quarter were Rs 2,177 crores while write-offs were Rs 3,005 crore.
Consequently, net slippages for the quarter stood at Rs 2,621 crore compared to Rs 636 crore in Q4FY19 and Rs 1,420 crore in Q1FY19. Net slippages (before write-offs) in retail and SME stood at Rs 889 crore and Rs 414 crore respectively.
As on June 30, 2019, the bank’s gross NPA stood at Rs 29,405 crore and net NPA stood at Rs 11,037 crore. The bank downgraded Rs 2,242 crore into the BB pool this quarter, mostly from groups that have shown new signs of stress in recent months.
Post this action, the bank’s BB and below-rated book remained largely stable QoQ and stood at Rs 7,504 crores. This is 1.3 percent of the bank’s gross customer assets, significantly down from 7.3 percent at peak. As on June 30, 2019, the bank’s provision coverage, as a proportion of gross NPAs including prudential write-offs, stood at 78 percent up from 77 percent in Q4FY19.
During the quarter, the bank made a change in internal guidelines to continue increasing conservatism in its provisioning. The Bank has now introduced a process of making systematic provisions towards non-fund based facilities in NPA and in stressed accounts outside NPA. This change created a one-time provisioning impact of Rs 459 crore during the quarter. The bank has now made multiple interventions over the last few quarters to create additional provisions outside regular NPA provisions.As on June 30, 2019, the bank has additional provisions of Rs 2,358 crore towards various risk contingencies, over and above the regular NPA provisioning and the 0.4 percent standard assets provisioning requirement. These Rs 2,358 crore of provisions are not counted towards Provision Coverage Ratio calculations of the
As on June 30, 2019, the bank had a network of 4,094 domestic branches and extension counters situated in 2,380 centres compared to 3,787 domestic branches and extension counters situated in 2,211 centres last year. As on June 30, 2019, the bank had 11,950 ATMs and 5,066 cash recyclers spread across the country.Shares of Axis Bank ended at Rs 706.55, down Rs 13.10, or 1.82 percent on the BSE.