Higher fees and strong net interest income (NII) growth drove the banker's earnings. Shares of Axis Bank Ltd ended at Rs 933.35, up by Rs 2.65, or 0.28 percent on the BSE. The results came after the close of the market hours.
Private sector lender Axis Bank on Monday, January 23, reported a 62 percent year-on-year (YoY) jump in net profit at Rs 5,853.1 for the third quarter that ended December 31, 2022, driven by strong net interest income (NII) growth and higher fees.
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In the corresponding quarter last year, the bank posted a net profit of Rs 3,614.2 crore. CNBC-TV18 Polls had predicted a profit of Rs 5,472.7 crore for the quarter under review.
The bank's operating profit for the third quarter grew 51 percent year-on-year and 20 percent sequentially (over Q2 of this fiscal) to Rs 9,277 crore. Core operating profit for the quarter grew 53 percent year-on-year and 13 percent sequentially Rs 8,850 crore.
The bank's NII grew 32 percent year-on-year and 11 percent sequentially to Rs 11,459 crore. Net interest margin (NIM) for the third quarter stood at 4.26 percent, up 73 bps year-on-year and 30 bps over the second quarter of FY23.
The fee income for the third quarter grew 23 percent year-on-year and 6 percent sequentially to Rs 4,101 crore. Retail fees grew 30 percent year-on-year and 8 percent sequentially; and constituted 69 percent of the bank's total fee income.
Retail assets (excluding cards and payments) fee grew 22 percent year-on-year and 14 percent sequentially. Retail cards and payments fees grew 44 percent year-on-year and 1 percent sequentially. The corporate and commercial banking fees together grew 8 percent year-on-year and 3 percent sequentially.
The trading gains for the quarter grew 17 percent year-on-year to Rs 428 crore, and miscellaneous income in the third quarter grew 5 percent year-on-year to Rs 136 crore. Overall, non-interest income (comprising fee, trading profit, and miscellaneous income) for the third quarter grew 21 percent year-on-year and 18 percent sequentially to Rs 4,665 crore.
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Provision and contingencies for the third quarter stood at Rs 1,438 crore. These include non-recurring, one-time/prudent provisions of Rs 340 crore. Specific loan loss provisions for the third quarter stood at Rs 1,341 crore.
The bank has not utilised its COVID provisions during the quarter. It holds cumulative provisions (standard plus additional other than NPA) of Rs 5,012 crore at the end of the third quarter.
On an aggregated basis, its provision coverage ratio (including specific plus standard plus additional plus COVID provisions) stood at 139 percent of GNPA as on December 31, 2022. Credit cost for the quarter that ended December 31, 2022, stood at 0.65 percent.
Amitabh Chaudhry, MD, and CEO of Axis Bank said the Citi merger has been shaping up very well, and the bank is extremely happy with the response it's getting from customers and employees alike, "We are excited to welcome them all to the Axis family," he said.
(Edited by : Shoma Bhattacharjee)
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