Axis Bank Q3 net up 22%, stock hits 52-wk high

India's third largest private sector lender Axis Bank 's October-December quarter net profit scaled up to a forecast beating 22% year-on-year to 1,347 crore, driven by three-pronged reasons: lower provisions against bad loans, higher net interest income and robust fee income.

Net interest income or the difference between interest earned and paid out, spurted about 17% to Rs 2,495 crore while fee income shot up 15% to Rs 1,4052 crore. Net interest margin (NIM) stood at 3.57% compared with 3.46% in the July-September quarter.

"The Bank has recorded healthy performance in terms of growth of net interest income, fee income and operating revenue for the 9 month period ended 31st December, 2012. With slower growth in operating
expenses, the bank's operating profit and net profit have also shown healthy growth," the lender said in a press release.

On an average analysts had expected net profit growth at 17% in Q3, FY13 while NII at 14%.

During the quarter, provisions and contingencies declined to Rs 387 crore as against Rs 422 crore a year back.

The bank's loan book expanded nearly 21% to Rs 1.80 lakh crore. This is way above the industry credit growth at 16%. Axis Bank increased its focus on retail lending. Its share of retail credit upped to 27% of its net advances as against 26% earlier. The bank had to go through some asset quality pain in select corporate loan accounts.

In Q3 however, the lender managed to retain its asset quality. Gross non-performing asset ratio remained unchaged at 1.1% while net NPA ratio was little changed at 0.33%. Axis Bank restructured assets to the tune of Rs 368 crore vs Rs 323 crore in the previous quarter.

Deposits grew more than 17% y-o-y to Rs 2.44 lakh crore. The share of current and savings account sustained at 40%. Capital adequacy ratio too improved by 74 basis points QoQ to 13.73%.

Axis Banks shares on Tuesday closed at Rs 1,424, up 3% after hitting a 52-week high of Rs 1,431 during the day's session.

saikat.das@network18online.com