Axis Bank posted a net profit of ₹7,130 crore for Q4 FY24 compared with a net loss of ₹5,728 crore in the year ago period. Sequentially, the profit after tax was 17 per cent higher.

The year ago figures are not entirely comparable due to the merger of Citibank’s consumer banking business with Axis Bank with effect from March 1, 2023.

During the quarter, the bank reclassified Covid provisions of ₹5,012 crore as other provisions. Total provisions and contingencies were ₹1,185 crore, of which loan loss provisions were ₹832 crore largely due to the rise in share of unsecured loans in the asset mix, CFO Puneet Sharma said in the earnings call. Axis Bank held cumulative provisions of ₹12,134 crore as of March 2024.

Net slippages for the quarter were ₹398 crore, whereas retail slippages were ₹1,061 crore. Recoveries and upgrades stood at ₹2,155 crore, and the bank wrote-off loans worth ₹2,082 crore. Gross NPA ratio of the bank improved to 1.43 per cent from 1.58 per cent a quarter ago and 2.02 per cent a year ago. The net NPA ratio at 0.31 per cent too was better than 0.36 per cent in the previous quarter and 0.39 per cent in the previous year.

Loan, deposit growth

Advances grew 14 per cent y-o-y and 4 per cent q-o-q to ₹9.7 lakh crore, of which retail loans were ₹5.8 lakh crore, up 15 per cent on year and 7 per cent on quarter. Home loans grew 5 per cent on year, personal loans by 31 per cent and credit card advances 30 per cent. Small Business Banking (SBB) grew 33 per cent and the rural loan portfolio by 30 per cent.

“Our higher yielding focus segments including SME, mid corporate, SBB, rural, personal loans and credit cards have grown at a CAGR of 25 per cent over the last 4 years and now constitute 43 per cent of total advances, up by 1210 bps over this period,” MD and CEO Amitabh Chaudhry said.

Net Interest Income (NII) for the quarter grew 11 per cent y-o-y and 4 per cent q-o-q to ₹13,089 crore. Net interest margin (NIM) was 4.06 per cent, up 5 bps on quarter.

Deputy MD Rajiv Anand said that corporate loan demand is broad-based across sectors and the pipeline for incremental demand continues to be quite strong. However, given the market conditions, corporates are more incentivised to borrow from the bond market. Axis Bank has capabilities in both debt capital markets and loan origination, owing to which “income on the wholesale bank side may not come through NII but fee income” for some time as the bank engages with corporates across the capital structure.

The higher transaction banking flows on the wholesale side also led to higher current account flows during the quarter, Chaudhry said, adding that as per what is being seen in the market, deposit growth will remain constrained and liquidity will remain tight as a result of which the loan growth will also reflect the same.

Axis Bank, on its part has taken “deliberate planned steps” to build the strength of the deposit franchise which led to sustained deposit growth through FY24 and is expected to continue going into FY25, he said.

Total deposits grew 13 per cent y-o-y and 6 per cent q-o-q to ₹10.7 lakh crore. SA deposits grew 2 per cent y-o-y and 4 per cent q-o-q whereas CA deposits grew 5 per cent y-o-y and 18 per cent q-o-q, taking the share of CASA deposits to 43 per cent. Term deposits grew 22 per cent on year and 5 per cent on quarter.