India's third largest private sector lender Axis Bank on Friday reported a 25% year-on-year jump in its fourth quarter net profit (Jan-March) at Rs 1,277 crore, bolstered by higher interest income. Net interest income or the difference between interests earned and paid, climbed 26% to Rs 2,146 crore.
India's third largest private sector lender Axis Bank on Friday reported a 25% year-on-year jump in its fourth quarter net profit (Jan-March) at Rs 1,277 crore, strengthened by higher interest income. Net interest income or the difference between interests earned and paid, climbed 26% to Rs 2,146 crore.
The numbers are partially better than market expectations. A CNBC-TV18 poll predicted a net profit growth of 16 while NII at 26.5%.
Net interest margin (NIM) rose to 3.55% from 3.44% in the corresponding quarter of the previous year. Fee inocme rose 8% y-o-y to Rs 1,327 crore.
For the fiscal year 2011-12, net profit rose at a similar pace by 25 to Rs 4,242 crore. The bank’s loan book expanded by 19% to Rs 1.42 lakh crore.
During the year, the gross non-performing asset (NPA) ratio improved to 0.94% as against 1.01% a year back. The net NPA ratio too fell marginally from 0.26% to 0.25%. Consequently, provisions and contingence fell to Rs 1,143 crore as against Rs 1,280 crore.
In the Jan-March quarter, the bank restructured loans worth Rs 558 crore. Total restructured assets stood at Rs 3,060 crore as against Rs 1,930 crore.
Deposits grew a little above 16% to Rs 2.20 lakh crore. Demand deposits (current account + saving account), however increaed at a faster pace by 18% to Rs 91,422 crore. Hence, the share of CASA to total deposits improved to 42% compared with 41% a year back.
"Overall the bank has posted good Q4 earnings. The asset quality improvment coupled with better loan recovery dismisses any future threat to the bank. It has recovered Rs 593 crore as against Rs 121 crore in Q4, FY11," said Nilanjan Karfa, a banking analyst from Brics Securities.
Axis Bank has proposed a dividend of Rs 16 per share. Meanwhile, the board of the bank has also approved the reassessment of the valuation of the Enam Securities at Rs 1,396 crore and consequently in consideration of demerger, the bank will issue shares in the ratio of 5 equity shares of bank for every 1 equity share held by shareholders of the Enam.