Shares of Axis Bank were trading 0.6 per cent lower on Thursday, ahead of the results for Q4 and FY23 scheduled to be declared post-market hours on Thursday. The private sector lender is expected to post a net loss for Q4 owing to one-time integration costs following the acquisition of Citibank India’s consumer banking business effective March 2023..

“This quarter is not representative of the underlying business as it includes the integration of Citi’s business in the portfolio. The bank would be reporting a loss to mark down the goodwill on this acquisition,” Kotak Institutional Equities said in a note.

Analysts peg loan growth for the bank at 14-16 per cent YoY led by retail and SME loans and deposit growth at 11-12 per cent, whereas margins are expected to be flat.

“Excluding Citi portfolio’s acquisition, Axis Bank’s growth is relatively slow, which should weigh on margins,” Emkay Global Financial said.

Net interest income (NII) is seen up 33-38 per cent YoY and 3-8 per cent QoQ on the back of accelerated transmission.

Slippages are expected to be controlled at around ₹4,000 crore or 2 per cent of loans, mostly led by small ticket loans. As a result, credit costs are seen muted at 79 bps while cost of funds is expected to move up.

Also read: Axis Bank enters into co-lending pact with Autotrac Finance through Yubi

Even as asset quality ratios are seen improving aided by stronger recoveries and upgradations, the bank is likely to make higher provisions during the quarter for expenses pertaining to the merger.

Management’s guidance on Citi portfolio integration, growth outlook, moderation in cost ratios, traction in deposits, and progress on NIMs will be the key monitorables for the quarter, analysts said.