Axis Bank delivered a strong performance across all key parameters in the June quarter. The net interest income grew by 31 per cent over the previous year backed by strong growth in retail loans and improvement in net interest margins. Trading gains, which nearly trebled over the previous year, boosted other income. This has been utilised to make additional provisions for non-performing assets.

The bank has outpaced the industry once again delivering a loan growth of 16 per cent, driven by its strong retail focus. Retail loans, with a share of 29 per cent in total loans, grew 40 per cent.

However, slowdown in the large and mid-corporate segment pulled down the overall loan growth. This segment grew 7.5 per cent during the quarter. However, the small and medium entities (SME) loans maintained its momentum, growing 27 per cent. Axis Bank has been focussing on low-cost CASA (current account, savings account) deposits. While savings deposits have grown at a higher-than-industry average of 20 per cent, overall deposits have grown at only 7 per cent been due to lower growth in current account deposits and term deposits. However, the proportion of CASA to overall deposits increased by 300 basis points. Also, with the bank focussing on increasing the share of retail term deposits, these deposits grew 18 per cent.

In February, the bank raised capital worth of Rs 4,726 crore through a qualified institutional placement. As these funds start getting utilised, the net interest margin may trend downward due to increase in balance-sheet size. The bank is well capitalised under the Basel III requirements with a total capital-adequacy ratio of 16.4 per cent as of June-end.

The bank’s asset quality is also comfortable, with gross non-performing assets at 1.1 per cent and net non-performing assets at 0.35 per cent of loans in the June quarter. The restructured assets stood at Rs 4,211 crore, which is 2.1 per cent of total loans.

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