Axis Bank Q2 result: Lender reports 70% YoY rise in net profit at Rs 5,330 crore

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Axis Bank on October 20 posted a 70 percent year-on-year (YoY) rise in its net profit, for the quarter ending September (Q2FY23).

Net profit grew 29% QoQ.

It reported a net profit of Rs 5,329.77 crore for the quarter under review. It had logged a profit of Rs 3,133 for Q2FY22 and Rs 4,125 crore for Q1FY23.

The YoY increase in net profit beat street estimates as analysts had expected the bank to report a 45 percent YoY surge for the quarter, supported by healthy core income growth and strengthening asset quality.

Its net interest income (NII) went up by 31 percent YoY to Rs 10,360.3 crore, from Rs 7,900 crore in Q2FY22. It was Rs 9,384 crore in Q1FY23. Its net interest margin (NIM) was at 3.96%, which is a rise of 57 bps YoY and 36 bps rise QoQ.

Also read: An earnings-based non-directional options strategy in Axis Bank

Its provisions stood at Rs 549.78 crore in Q2FY23, which is a fall of 68 percent from Rs 1,735 crore in Q2FY22.

Analysts had expected provisions to halve from the year-ago period, which would lead to a boost in profit for the quarter ended September. Bad loan ratios were expected to tick down.

However, provisions had gone up 52% QoQ from Rs 359.36 crore in Q1FY23.

The bank's gross NPA was 2.5% in Q2FY23 against 3.53% in Q2FY22, and 2.76% in Q1FY23. It was a 103bps fall YoY and a 26 bps fall QoQ. Its net NPA stood at 0.51% in Q2FY23, against 1.08% in Q2FY22 and 0.64% in Q1FY23.

Its gross slippage ratio declined by 156 bps YoY and 17 bps QoQ, and net slippage ratio was at 0.32%, which was a fall of 14 bps YoY.

Axis Bank issued 1.04 million credit cards in the September quarter, while spends going up 70% YoY. Its retail loans grew 22% YoY and 3% QoQ. Small business banking (SBB) and rural loans grew at 69% and 46% year on year (YoY) respectively.

In a press statement, Amitabh Chaudhry, MD and CEO of the bank, was quoted on the bank's expansion plans. "We are building a high-quality, granular franchise with the customer at the centre, while extending our network and services to semi-urban and rural geographies to tap into the Bharat opportunity," the statement read.