Axis Bank has posted a 91 per cent rise in net profit at ₹4,125 crore in Q1 FY23, led by strong growth in net interest income.

Advances for the private sector lender grew 14 per cent to ₹7.0 lakh crore as of June 30, of which, retail loans posted a growth of 25 per cent to ₹4.1-lakh crore, accounting for 59 per cent of the net advances of the bank.

Within retail loans, home loans grew 18 per cent, small business banking loans grew 74 per cent, rural loans were up by 42 per cent, unsecured personal loans by 20 per cent, and credit card spends by 42 per cent.

In the earnings call, CFO Puneet Sharma said that while the wholesale loan segment also continues to grow, the bank is being cautious and is going slow as it wants to focus only on profitable lending segments.

In a release, the bank said it issued 9.9 crore 0.99 million new credit cards in Q1 FY23, adding that the bank has been one of the highest credit card issuers in the country in the last two quarters, taking the bank’s market share in the segment to 12.3 per cent at the end of June.

Axis Bank’s net interest income grew 21 per cent and 6 per cent sequentially to ₹9,384 crore. The NIM (net interest margin) for the quarter was at 3.60 per cent, up 14 bps on year and 11 bps on quarter.

Sharma said the movement in NIM as per the bank’s guided trajectory. “You can take on higher risk and increase NIMs, so our growth factors in credit implication on the book. A rising interest rate environment plays to the strength of the larger bank and it should be positive for us on a net basis,” he said.

The lender’s other income fell 11 per cent to ₹2,999 crore, largely on account of trading loss of ₹667 crore, compared to trading gains of ₹556 crore in the year-ago period.

Slippages for the quarter were at ₹3,684 crore, largely off-set by loan recoveries and upgrades of ₹2,957 crore. The bank also wrote-off loans worth ₹1,513 crore in the quarter. Gross NPA ratio of the bank improved to 2.76 per cent from 2.82 per cent a year ago, and the net NPA ratio, too, was better at 0.64 per cent compared with 0.73 per cent in the previous year.

On the ongoing merger with Citibank India, Axis Bank MD & CEO Amitabh Chaudhry said that the bank has applied to the CCI and expects the approval for the same within 6-8 weeks.