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Axis Bank Q1 results: Net profit jumps 94% YoY to Rs 2,160 crore, misses estimates

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Axis Bank on Monday saw its net profit almost double to Rs 2,160.15 crore in the June quarter on the back of a healthy loan book growth and a fall in bad loan provisions.

Axis Bank Q1 results: Net profit jumps 94% YoY to Rs 2,160 crore, misses estimates
Private sector Axis Bank on Monday reported a 94 percent rise in net profit at Rs 2,160 crore during the quarter ended June 30, 20201.
In the corresponding quarter last year, the bank posted a net profit of Rs 1,112 crore. CNBC-TV18 Poll had predicted a profit of Rs 2,575.1 crore for the quarter under review.
In the first quarter of the current fiscal, the total income of the bank rose to Rs 19,591.63 crore from Rs 19,032.15 crore in the same period a year ago, according to a regulatory filing. Sequentially, it was down from Rs 20,162.76 crore in the quarter ended March 2021.
Bank's net interest income (NII) grew 11 percent YOY to Rs 7,760.3 crore during the quarter. The bank's balance sheet grew 14 percent YOY and stood at Rs 10,12,050 crore as of June 30, 2021.
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As of June 30, 2021, the bank's reported Gross NPA and Net NPA levels were 3.85 percent and 1.20percent respectively as against 3.70 percent and 1.05 percent as of March 31, 2021. Gross slippages during the quarter were Rs 6,518 crore, compared to Rs 5,285 crore during Q4FY21 and Rs 2,218 crore in Q1FY21.
Slippages in Q1FY21 were moderated due to regulatory forbearances that do not exist in the current quarter. Recoveries and upgrades from NPAs during the quarter were Rs 2,543 crore while write-offs were Rs 3,341 crore.
Consequently, there were net slippages in NPAs (before write-offs) for the quarter of Rs 3,976 crore as compared to Rs 1,822 crore in Q4FY21 and net slippages of Rs 1,610 crore in Q1FY21. Net slippages in NPAs (before write-offs) for Retail and SME loans stood at Rs 3,741 crore and Rs 84 crore respectively.
As of June 30, 2021, the bank's provision coverage, as a proportion of Gross NPAs stood at 70 percent, as compared to 75 percent as of June 30, 2020, and 72 percent as of March 31, 2021.
The standard restructured loans under the resolution framework for COVID-19 related stress as of June 30, 2021, stood at Rs 2,192 crore that translates to 0.33 percent of the gross customer assets. The bank carries a provision of 23 percent on restructured loans, which is in excess of regulatory limits.
The total deposits grew by 16 percent on period-end basis and by 11 percent YOY on a quarterly average balance (QAB) basis. On a QAB basis, savings account deposits grew 19 percent YOY and 7 percent QOQ, current account deposits grew 17 percent YOY; and retail term deposits (RTD) grew 11 percent YOY and 2 percent QOQ.
On a QAB basis, CASA and RTD deposits put together grew 15 percent YOY and 3 percent QOQ. The share of CASA plus RTD deposits in total deposits on a QAB basis was up 209 bps YOY to 83 percent as of June 30, 2021.
The bank's advances grew 12 percent YOY to Rs 6,14,874 crore as of June 30, 2021. The bank's loan to deposit ratio stood at 86 percent. Retail loans grew 14 percent YoY and were largely flat on a sequential basis to Rs 3,31,242 crore and accounted for 54 percent of the net advances of the bank.
The share of secured loans was 80 percent, with home loans comprising 37 percent of the retail book. Disbursements in the Retail segment were up around 3.3 times.
SME loan book grew 18 percent YOY to Rs 58,537 crore. 96 percent of the SME book is secured with predominantly working capital financing, and is well diversified across geographies and sectors.
Corporate loan book grew by 8 percent YOY. 85 percent of the corporate book is now rated A- and above with 94 percent of incremental sanctions in Q1FY22 being to corporates rated A- and above.
The shareholders’ funds of the Bank grew 2 percent QoQ and stood at Rs 1,03,890 crore as of June 30, 2021. Under Basel III, the Capital Adequacy Ratio (CAR) and CET1 ratio as of June 30, 2021, including Q1FY22 profits were 19.01 percent and 15.42 percent respectively.
Additionally, the bank held Rs 5,012 crore of COVID provisions, not considered for CAR calculation providing a cushion of 67 bps over the reported CAR. The book value per equity share increased from Rs 305 as of June 30, 2020, to Rs 339 as of June 30, 2021.
As of June 30, 2021, the Bank had a network of 4,600 domestic branches and extension counters situated in 2,628 centres compared to 4,528 domestic branches and extension counters situated in 2,559 centres as at end of June 30, 2020. As of June 30, 2021, the Bank had 11,061 ATMs and 5,744 cash recyclers spread across the country.
The results came after the close of the market hours. Shares of Axis Bank ended at Rs 756.15, up by Rs 0.09, or 0.12 percent on the BSE.