Private sector lender Axis Bank has reported a 22 per cent increase in net profit at Rs 1,154 crore during April-June on robust loan growth and interest income.

The net profit was at Rs 942 crore in the year-ago period.

Net interest income (difference between interest earned and interest expended) rose by 26 per cent to Rs 2,180 crore (Rs 1,724 crore in the year-ago period).

The net interest margin was 3.37 per cent in the quarter compared with 3.28 per cent during the year-ago period. However, it declined sequentially from 3.55 per cent in the January-March quarter due to rise in cost of funds by 25 basis points.

Other income, comprising of fee income and trading income, rose by 14 per cent to Rs 1,335.51 crore during the quarter as compared with Rs 1,168 crore in the year-ago period.

Retail term deposits increased by 44 per cent constituting 39 per cent of the total deposits.

The bank’s restructured assets (accounting for 1.32 per cent of gross customer assets) stood at Rs 628 crore in the quarter with 80 per cent in the large and mid-corporate sector.

The restructured assets in January to March period were at Rs 588 crore.

Bank’s net non-performing assets (NPAs) was at 0.31 per cent showing a slight increase from 0.25 per cent in the March quarter indicating some stress in its assets.

Gross slippages

“Gross slippages during the quarter have come from large corporates across segments with Rs 456 crore turning to NPAs,” said Mr Somnath Sengupta, Chief Financial Officer.

Mr Sengupta ruled out any base rate cuts for now. Further, he sees “no reason for the Reserve Bank to cut policy rates in the upcoming monetary policy on July 31”.

Shares of the bank closed at Rs 1,023.30 a share on the Bombay Stock Exchange, lower by 2.10 per cent from its previous close.

(This article was published on July 17, 2012)
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