April 25, 2013 / 10:54 IST
Moneycontrol Bureau
Aided by higher interest and other income
Axis Bank – the third largest private sector lender reported a forecast beating 22 percent year-on-year rise in its fourth quarter (Jan-March) net profit at Rs 1,555 crore. Net interest income (NII) or the difference between interest earned and paid out, rose 24 percent YoY to Rs 2,665 crore.
On an average, analysts had expected Q4 net profit to grow 12 percent at Rs 1431. NII would rise 22 percent to Rs 2,615 crore.
"It was a strong quarterly performance in an adverse environment," Somnath Sengupta, Executive Director – Axis Bank told reporters in a conference call.
"Healthy growth in NII and other income has contributed to the net profit rise. We have booked good trading profits. Some loan restructuring are expected in the coming quarters. In Q4, we recorded higher growth in low cost current and savings account deposits. However, it is always a challenge to sustain CASA growth. We are planning to open 250 branches in FY14," he said.
Other income including fees, trading profit and miscellaneous income rose 26 percent to about Rs 2,010 crore. Trading gains shot up 63 percent to Rs 240 crore. The bank restructured Rs 790 crore loans during the quarter. Outstanding restructured book stood at about Rs 4,370 crore compared with Rs 3,060 crore a year ago.
Bank loans expanded 16 percent YoY to nearly Rs 1.97 lakh crore. Retail loans grew at faster pace of 44 percent to Rs 54,000 crore. Home loans accounted for 65 percent of the retail book. Net interest margin (NIM) stood at 3.70% as against 3.55% a year back.
"Our loan growth has been higher than the industry. Our net interest margin would be in the range of 3.25 – 3.50 percent in FY14. Probably, it could better than this. We were under represented in retail loans. We are now building up base for this. In FY14, we expect the share of retail to be at around 30 percent of our loan book as against 27 percent currently," Sengupta said.
Axis Bank's gross non-performing asset (NPA) ratio rose to 1.06% as against 0.94% a year ago. Net NPA ratio stood at 0.32% compared with 0.25%. Its provisions increased significantly from Rs 139 crore to Rs 595 crore YoY. During the year, the bank created a contingency fund of Rs 375 crore.
The lender, according to Sengupta, has set aside contingency funds for those additional loan accounts that show some stress on repayments.
Deposits rose nearly 15 percent YoY to Rs 2.53 lakh crore while the share of low cost CASA deposits grew 23 percent while it constituted 36 percent of total deposits.
For the full year 2012-13, Axis Bank's net profit rose 22 percent YoY to about Rs 5,200 crore. NII increased 21 percent to Rs 9,700 crore.
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