Axis Bank Q3 results | Here are top five highlights

The net loan book of the private sector lender grew 15 percent on-year to Rs 7.62 lakh crore.

Axis Bank on January 23 reported healthy growth in its net profit on the back of higher net interest income (NII), net interest margins expansion, higher fees and moderation in operating expenses.

Here are the top five takeaways from the lender's Q3FY23 earnings:

Strong net profit

The bank’s standalone profit after tax (PAT) rose 62 percent year-on-year to Rs 5,853 crore for the quarter ending December.

The profit growth was higher than the estimates of analysts. The average of the estimates of seven brokerages polled by Moneycontrol had forecast the net profit for the December quarter at Rs 5,321.5 crore.

Net interest income

NII or the difference between interest earned and interest expended, rose 32 percent on-year and 11 percent on-quarter to Rs 11,459 crore on the back of a strong 15 percent loan growth and an expansion in net interest margins.

Analysts estimated NII to grow 25 percent to Rs 10,846 crore.

The net interest margins of the bank were at 4.26 percent, improved by 73 basis points (bps) on-year and 30 bps on-quarter.

Also read: Axis Bank’s Q3 net profit surges 62% to Rs 5,853 crore, beats estimates

Asset quality

The gross non-performing asset (NPA) ratio of the bank has seen an improvement during the quarter ending December.

It declined by 79 bps on-year and 12 bps on-quarter to 2.38 percent as on December 31, 2022.

Whereas, on the other hand, net NPA eased 44 bps on-year and 4 bps on-quarter to 0.47 percent.

The gross slippage ratio (annualised) of the bank has declined by 56 bps on-year at 2.03 percent, and the net slippage ratio (annualised) stood at 0.93 percent.

Advances

The net loan book of the private sector lender grew 15 percent on-year to Rs 7.62 lakh crore. On a sequential basis, advances rose 4 percent.

Loans sold under inter-bank participation certificate grew 16 percent on-year and 4 percent on-quarter during the reporting quarter.

“Corporate loans grew 8 percent on-year and 9 percent on-quarter, SME loans grew 24 percent year-on-year, Mid-Corporate (MC) up 42 percent on-year, SBB+SME+MC mix at Rs 1,537 billion. 20 percent of loans, up 510 bps in last 2 years,” the bank said in an earnings release.

Retail loans grew 17 percent on-year and 1 percent on-quarter.

Fee income & operating expenses

Fee income of the bank in the reporting quarter grew 23 percent on-year and 6 percent on-quarter. Of this, granular fee constituted 93 percent of overall fees.

Retail fee grew 30 percent on-year and 8 percent on-quarter.

Operating expense growth moderates from 14 percent on-year in Q2FY23 to 8 percent on-year in Q3FY23.