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Axis Bank Q3 earnings preview | Net interest margin set to rise; Street to watch credit cost commentary

earnings | Jan 22, 2023 5:34 PM IST

Axis Bank Q3 earnings preview | Net interest margin set to rise; Street to watch credit cost commentary

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The Axis Bank Net Interest Margin (NIM) is expected to improve both year-over-year and quarter-over-quarter when the private lender announces its third-quarter earnings on January 23. According to Phillip Capital estimates, loan growth is expected to be at 15.4 percent year-over-year and 5 percent quarter-over-quarter.

Private sector lender Axis Bank will announce its third quarter performance on Monday, January 23. Sector watchers, who spoke to CNBC-TV18 said that when analysing the financial performance of a bank, investors should keep an eye on several key metrics.

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Firstly, the Net Interest Margin (NIM) is expected to improve both year-over-year and quarter-over-quarter. According to Phillip Capital estimates, loan growth is expected to be at 15.4 percent year-over-year and 5 percent quarter-over-quarter.
Phillip Capital Estimate*NIM (%)
Q3FY23*4.05
Q2FY233.96
Q1FY233.6
Q4FY223.49
Q3FY223.53
According to the CNBC-TV18 poll, the bank is expected to see strong growth. with net Interest Income (NII) expected at Rs 10,948.3 crore, which is a year-on-year increase of 26.5 percent (5.7 percent QoQ).
The net profit is expected to be at Rs 5472.7 crore, which is an increase of 51.4 percent annually and 2.7 percent versus the previous quarter.
The total watchlist for the bank is expected to be at Rs 7,987 crore, which represents 1.09 percent of the bank's loans. Additionally, the restructured book is expected to be at Rs 2,996 crore, representing 0.41 percent of the bank's loans.
The asset quality is also expected to improve marginally, with Phillip Capital estimating Gross Non-Performing Assets (GNPA) at 2.4 perent quarter-over-quarter, compared to 2.5 percent in the previous quarter.
Slippages are estimated to be at Rs 3,500 crore versus Rs 3,383 crore in the previous quarter. Investors will also closely watch the management commentary on the bank's outlook with respect to growth and credit cost.
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