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Despite a spike in provisions, relatively stable asset quality, healthy loan growth and higher interest income helped Axis Bank post an 18 per cent rise in net profit for the fourth quarter ended March 31, 2015, at ₹2,180 crore.
The country’s third-largest private bank saw its retail loans grow 27 per cent. Corporate credit growth was also stable at 23 per cent.
Provisions increased 40 per cent to ₹710 crore from ₹505 crore a year ago.
“Higher provisions were because we were required to provide for unhedged foreign exchange exposure…Investment activity continues to remain low. Infrastructure has continued to be fairly challenging.
“On the retail side, mortgages and unsecured lending helped,” said Sanjeev Gupta, Executive Director (Corporate Centre) and CFO, Axis Bank. Net interest income (the difference between interest earned and expended) increased 20 per cent to ₹3,799 crore, while other income rose 21 per cent to ₹2,687 crore driven by healthy fee income, trading profit and miscellaneous income growth.
Gross non-performing assets (NPAs) as a percentage of total loans increased marginally to 1.34 per cent as on March-end 2015 as compared with 1.22 per cent in the year-ago period.
Restructuring of accounts “We expect two to three accounts (loans) worth ₹500 crore to be in the restructuring pipeline…
“Credit growth will continue to be at 18-20 per cent with retail growth at around 25 per cent and corporate growth a little lower at 17-18 per cent,” Gupta said.
He added that the next two quarters will remain challenging and expects economic activity would to be back-ended, though FY16 to be better than FY15.
Hiking FII limit Axis Bank said it would seek shareholders’ approval to raise the foreign investment limit in it to 74 per cent from 62 per cent currently after the bank board approved the plan.
The board also approved a plan to issue up to ₹14.2 crore depository receipts, which would facilitate a share issue outside India.
Axis Bank’s shares closed higher at ₹552.90 a share, up ₹17.65 (3.30 per cent) over the previous close on the BSE.
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