Axis Bk expects ROE will be closer to 18% by end of FY

Axis Bank has announced its Q1 resullts. Here are the key Concall take aways..........

On NIMs

NIM are lower than Q4 as cost of funds has increased; also higher allocations to no return CRR; Q4 also has dividend income

Expect NIMs to improve during the year as CASA improves & PLR hike takes effect

Dip in CASA- bank takes balance on the last day of the quarter ..could be volatile. Better indicator is daily average balances which have shown growth

Fee Income

Fee income grew 80% - fee from retail business: Rs162 crore; fee from loans & advances: Rs 150 crore; CMS transactions ; merchant banking : Rs 90 cr

Trading profit muted at 15%

Provisions

Provisions of R 296 crore; 148 crore ( Rs 90 crore for equity) for non slr, 77 crore for slr; provision for NPAs Rs 79.4 crore

NPAs higher due credit cards. Tightening the credit appraisal norms. Have taken adequate measures to control slippages. Credit card portfolio is Rs 540 cr.

Future

The management said that they will maintain 45-48% growth. ROE will be closer to 18%  by end of fiscal

Other

Overseas operations account for 6.83% of balance sheet. Balance sheet size increased 43.68%. Credit ratio was at 69%. Yield on advances 10.56% in Q1 vs 10.74% in q4 vs 10.50 in q1FY08. Yield on investments at 7.63% vs 7.21%

Retail credit has grown at 52% YoY. Total portfolio of Rs 36400 crore - Rs 20700 crore in HTM, Rs 15054 cr available for sale.

Forex derivative losses of clients of Rs 565 cr ; no defaults in Q1

Size of equity book is Rs 664 crore. SLR is at 25%. NPAs to bad debts at Rs 66.72 crore versus Rs 49.46 crore. Identified 6400 accounts for loan waiver. “No idea on SUTTI plans of stake sale plans”