Axis Bank’s net profit shrunk for the sixth quarter on a trot, with the bottomline contracting 16 per cent in the reporting quarter ended June 30, 2017.
Compared to the previous three quarters, the net profit declined at a slower pace, which according to the bank’s management is an indication that turnaround in financial performance has gained momentum.
Net profit of India’s third-largest bank in the reporting quarter was at ₹1,306 crore, compared to ₹1,556 crore in the year-ago quarter.
In the reporting quarter, net interest income (interest earned less interest expended) edged up only 2 per cent year-on-year (y-o-y) in the backdrop of bad loans in gross terms jumping to ₹22,031 crore in the June 2017 quarter from ₹9,553 crore in the June 2016 quarter.
Other income, comprising fee, trading profit and miscellaneous income, grew 10 per cent y-o-y to ₹3,000 crore. Net interest margin (NIM) was lower at 3.63 per cent as against 3.79 per cent in the year ago quarter. Jairam Sridharan, CFO, said NIM could compress by about 20 basis points through the year. Advances grew 12 per cent y-o-y to ₹3,85,481 crore as on June-end 2017. Retail advances grew 22 per cent, corporate credit grew 3 per cent (the growth was led by working capital loans); and small and medium enterprise advances were up 10 per cent.
As of June-end 2017, retail advances accounted for 46 per cent (41 per cent as on June-end 2016) of net advances. Corporate credit accounted for 42 per cent (46 per cent) of net advances.
Total deposits increased 10 per cent y-o-y to ₹3,93,741 crore as on June-end 2017. The proportion of low-cost current account, savings account (CASA) deposits in total deposits improved to 49 per cent (43 per cent). Fresh slippages during the quarter amounted to ₹3,519 crore (₹4,811 crore in the preceding quarter). Total provisions, including towards loan losses and accounts under strategic debt restructuring and scheme for sustainable structuring of stressed assets (S4A), rose to ₹2,342 crore in the reporting quarter from ₹2,117 crore in the year-ago quarter.
Axis Bank shares closed at ₹544.65 apiece on Tuesday, up 1.94 per cent over the previous close, on the BSE.
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