The Hindu Business Line : Axis Bank Q3 net grows 66%

Higher interest income and better net interest margin enabled Axis Bank to report a 66 per cent growth in its net profit for the third quarter ended December 31, 2007.

The net profit increased to Rs 306.83 crore from Rs 184.61 crore in the corresponding quarter of the previous year.

CASA growth

“There has been a strong growth in our current account and savings account (CASA) portfolio and this has helped us in reducing the cost of funds. The growth in fee-based income and trading profit has also boosted the profit,” said Mr P.J. Nayak, Chairman and Chief Executive Officer, Axis Bank.

The net interest income rose by 91 per cent at Rs 747.34 crore for the quarter as compared to Rs 391.03 crore in the corresponding quarter of previous year. Mr Nayak attributed this to the rise in net interest margin, lower cost of funds and growth in net advances.

The net interest margin of the bank stands at 3.91 per cent (3 per cent). The bank expects its NIM to grow once its pipeline of corporate advances translates into loan assets.

The average cost of funds was at 5.72 per cent, marginally higher than 5.53 per cent in the year-ago period. However, the cost was lower as compared to 6.18 per cent in the previous quarter this year.

The current accounts grew by 81 per cent at Rs 15,264 crore and the savings bank account grew by 51 per cent at Rs 15,768 crore.

Other income grew by 74 per cent at Rs 487.90 crore (Rs 279.74 crore). Fee-based income increased by 81 per cent at Rs 348.41 crore and trading income went up at Rs 131.01 crore (Rs 79.28 crore).

“Profit growth was mainly on account of sharp improvement in margins and strong treasury income, said Mr Vishal Goyal, an analyst with Edelweiss Capital Ltd.

The net non-performing assets were down at 0.42 per cent (0.68 per cent).The capital adequacy ratio is at 16.88 per cent (11.83 per cent).

The bank’s stock was up by 2.52 per cent at Rs 1095.60 on the BSE on Wednesday.