Axis Bank posted profit of Rs 1,505 crore for the quarter ended March 2019, as provisions fell sharply and asset quality improved with a decline in slippages.
The bank had posted a loss of Rs 2,188.74 crore in the corresponding period last year. Higher NII, other income and operating income also supported profitability during the quarter.
Net interest income in Q4 grew by 21 percent year-on-year to Rs 5,705.6 crore with credit growth at 13 percent YoY and net interest margin at 3.44 percent.
"Domestic loans grew 18 percent while the overseas book de-grew by 29 percent. Retail loans which accounted for 50 percent of net advances grew 19 percent YoY and corporate loan book increased by 5 percent," Axis Bank said.
The total deposits on quarterly average basis (QAB) rose by 24 percent and on a period end basis, the total deposits grew 21 percent YoY, it added.
Other income or non-interest income increased 26 percent to Rs 3,526.3 crore and operating income shot up 37 percent to Rs 5,014.4 crore compared to year-ago.
Asset quality of the bank improved considerably during March quarter. Gross non-performing assets as a percentage of gross advances dipped to 5.26 percent against 5.75 percent in previous quarter and net NPA declined to 2.06 percent against 2.36 percent in Q3, which were on expected lines.
In absolute term, gross NPAs were lower by 13 percent at Rs 29,789.44 crore and net NPAs by 32 percent to Rs 11,275.6 crore compared to previous quarter.
Slippages for the quarter at Rs 3,012 crore were lower than Rs 3,746 crore reported in previous quarter and significantly lower than Rs 16,535 crore reported in March quarter 2018.
The private sector lender said corporate lending slippages stood at Rs 1,369 crore. "72 percent of this came from disclosed BB & below accounts. Its BB and below-rated book stood at Rs 7,467 crore. This is 1.3 percent of the bank’s gross customer assets, significantly down from 7.3 percent at peak."
Recoveries and upgrades from NPAs during the quarter were Rs 2,376 crore while write-offs were Rs 1,701 crore. Net slippages (before write-offs) in retail and SME stood at Rs 215 crore and Rs 189 crore respectively.
Provisions and contingencies fell 11 percent sequentially to Rs 2,711.43 crore in March quarter and the same declined 62 percent compared to year-ago.
Provision coverage ratio of the bank, as a proportion of gross NPAs including prudential write-offs, sequentially improved to 77 percent from 75 percent as it created higher provisions against select standard assets and made multiple changes to increase conservatism in provisioning, Axis Bank said.
For the financial year 2018-19, net profit stood at Rs 4,677 crore, which was quite higher compared to Rs 275.68 crore reported in previous fiscal.
The bank said net interest income grew 17 percent to Rs 21,708 crore during the year with net interest margin at 3.43 percent.
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