Mumbai, Jul 24 (PTI) Axis Bank on Wednesday reported a 5.66 per cent rise in consolidated net profit for the June quarter at Rs 6,436 crore, restricted by challenges on the asset quality front.
On a standalone basis, the third biggest private sector lender reported a 4 per cent rise in net profit at Rs 6,035 crore.
The core net interest income grew 12 per cent to Rs 13,448 crore during the quarter on the back of the net interest margin (NIM) staying stable at 4.05 per cent and 14 per cent growth in advances. The other income grew 14 per cent to Rs 5,783 crore during the quarter.
The bank witnessed a jump in the gross slippages to Rs 4,793 crore during the quarter as against Rs 3,471 crore in the March quarter and Rs 3,990 crore in the year-ago period.
Axis Bank Chief Financial Officer Puneet Sharma said there is a seasonality to the slippages number in the first quarter, where elevated setbacks on the agricultural loans front impact in the first quarter.
He, however, did not specify the exact hit on the agri exposure but said the overall retail segment accounted for Rs 4,229 crore of the slippages.
The loan loss provisions more than doubled to Rs 2,551 crore as against Rs 1,146 crore in the year-ago period, and were nearly three times higher when compared to the Rs 832 crore in the March quarter.
The annualised credit costs may look higher, but they do not represent the exact outcome on the front in FY25 because of the element of seasonality there, Sharma said.
In comments that come amid heightened regulatory concerns over the riskier unsecured loans, Sharma said the bank experienced higher credit costs on its unsecured loan exposures but was quick to add that it is within the guardrails that it has set for itself and there is nothing specific to call out on it.
Sharma said over 12 per cent of the overall book currently comes from the unsecured assets, while the bank's investor presentation said it is "comfortable" growing the book even though the credit costs will be higher.
Unsecured assets' share in the retail book has come down marginally to 29 per cent, he said. A senior official added that it has slowed down growth in the personal loan book, which got tempered to 29 per cent.
On the credit cards side, the bank said it issued 10 lakh credit cards during the quarter.
The gross non-performing assets ratio showed improvement at 1.54 per cent, 0.42 per cent lower than what it was in the year-ago period.
The deposit growth came at 14 per cent on a quarterly average balance basis, and the bank's deputy Managing Director Rajiv Anand said it will have to keep the rates at competitive levels in order to continue attracting flows.
During the quarter, the retail loans grew 18 per cent to increase its share of the overall book at 60 per cent, home loans grew 6 per cent, small and medium enterprises book grew 20 per cent, while the domestic corporate book grew 7 per cent.
The bank's overall capital adequacy stood at 16.65 per cent with the core buffers at 14.06 per cent.
Among the subsidiaries, Axis Finance net profit grew 26 per cent to Rs 154 crore, the asset management arm's net profit grew 27 per cent to Rs 116 crore, brokerage arm witnessed a 171 per cent jump to Rs 121 crore and Axis Capital had its post-tax profit shoot up 220 per cent to Rs 49 crore.
Analysts at domestic brokerage Stoxbox said the earnings are "muted" and the provisions are high.
The Axis Bank scrip closed 1.83 per cent down at Rs 1,239.75 apiece on the BSE as against a correction of 0.35 per cent on the benchmark. PTI AA TRB
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