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Jul 17, 2012, 10.25 PM IST
India's third largest private sector lender Axis Bank's first quarter (April-June) net profit rose more than 22% year-on-year to Rs 1,150 crore, boosted by a robust loan book that grew nearly 30% y-o-y to Rs 1.71 lakh crore.
India's third largest private sector lender Axis Bank 's first quarter (April-June) net profit rose more than 22% year-on-year to Rs 1,150 crore, boosted by a robust loan book that grew nearly 30% y-o-y to Rs 1.71 lakh crore.
A poll estimate by CNBC Awaaz had showed 20% rise in net profit on an average. Even if, the Q1 net was slighly higher than the expectation but Axis Bank shares fell more than 2% in the late afternoon trade on asset quality concern.
During the quarter, the net interest income or the difference between interest earned and paid out increased sharply by about 27% to Rs 2,180 crore. The net interest margin (NIM) fell by 18 basis points to 3.37% sequentially. Fee income upped 9% y-o-y to Rs 1,155 crore.
The bank has increased its share of retail loans to 24% of the total loan book as compared with 22% earlier. It has also brought down its credit exposure to small and medium enterprises to around 13% of the total loans from 15% earlier.
The lender's net non-performing asset (NPA) ratio increased to 0.31% from 0.25% in January-March quarter. Similarly, gross NPA ratio too rose to 1.06% as against 0.94% sequentially. This was indicative of some amount of stress in its assets (loans).
Investors were indeed jittery about its asset quality as the bank so far, has not announced any major loan default case, despite the fact that the majority of banks have been suffering from asset stress since the last few quarter. In the last one year, apprehensive investors chose to shun Axis Bank shares. They tanked more than 18% as against a fall of just 5% of the broader index Bank Nifty.
The lender restructured assets of Rs 628 crore taking the total value to Rs 3,827 crore, which is equivalent to nearly 2% of gross customer assets. Large and mid size companies formed most of the restructured loans to the tune of 80%. Moreover, it added fresh slippages of Rs 456 crore while upgradations were only Rs 62 crore. This has cumulatively led to the rise of NPAs.
When a loan account loses its status of standard asset to slip into non-performing asset territory, it is called slippage. Upgradation happens when a defaulting loan account repays his all previous dues (read full recovery) and starts repaying loan as usual.
Meanwhile, deposits expanded 21% y-o-y to Rs 2.23 lakh crore. The number of savings account grew 26% to Rs 124 lakh.
Capital adequacy ratio declined to 13.03% in Q1, FY13 as against 13.66% in Q1, FY12.
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