Axis Bank’s October-December net profit stood at Rs 656 crore, beating estimates, up 31% on year and 23% sequentially, driven by a healthy rise in both net interest income and fee income.
Net interest income for the bank was Rs 1,349 crore, up 45% on year and around 17% sequentially, helped by a low base.
Brokerages had seen the bank’s net profit rising to Rs 620 crore for the quarter. Net interest income was estimated at Rs 1,263 crore, a growth of 36% on year and 10% on quarter.
The bank’s loan book grew by 13% on year to Rs 84,770 crore.
Fee income increased by 29% to Rs 800 crore, mainly from large and mid-sized corporates that accounted for more than two-thirds of it.
In the July-September quarter, fee income had risen 15%.
Trading profit rose 49% from a year ago to Rs 170 crore in the December quarter.
The bank had an investment book of Rs 49,274 crore as of December 31, out of which Rs 28,734 crore were in government bonds.
The bank had kept 94% of its government securities in the held-to-maturity category.
However, Axis Bank’s gross non-performing assets jumped to 1.23% from 0.9% a year ago, with bad loans mainly from small and medium enterprises.
The bank restructured Rs 87 crore of loans in October-December, out of which Rs 57 crore turned sour.
Small and medium enterprises accounted for 41% of the restructured loans and large and mid-sized corporates for 40%.
Sector-wise textiles and education loans formed a major chunk of the total restructured assets.
“Some of these sectors are performing better, such as the auto ancillaries, but those sectors which are primarily dependent on exports have still not picked up,” said Somnath Sengupta, chief financial officer. The bank has so far restructured a total of Rs 2,309 crore of loans since April.
Owing to the rise in NPAs, the bank’s provisions increased to Rs 1,374 crore from Rs 910 crore a year ago.
The bank has a provision coverage ratio of 69.07% as of December 31, excluding technical write-offs, and the ratio increases to 87.83% when these are included. NW18
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