Axis Bank, India’s fourth-largest private sector bank by market capitalisation, is expected to report a 39.7 percent year-on-year rise in net profit — sans extraordinary expenses — when it releases its March quarter numbers on April 27, according to a Moneycontrol poll of three brokerages.
The bank is otherwise expected to report a loss of Rs 5,487 crore in the quarter due to the integration with Citibank. If the extraordinary expenses are excluded, the bank's net profit is seen rising 39 percent to Rs 5,784 crore.
The brokerage house Prabhudas Lilladher expects Axis Bank to report a net profit of Rs 5,902.9 crore, up 43.4 percent year-on-year (up 0.9 percent quarter-on-quarter). Net Interest Income (NII) is expected to increase 40.8 percent Y-o-Y (up 8.3 percent Q-o-Q) to Rs 12,415.8 crore. Pre Provision Operating Profit (PPOP) is likely to rise by 46.2 percent Y-o-Y (up 1.9 percent Q-o-Q) to Rs. 9,452.6 crore.
Brokerage house Kotak Institutional Equities expects Axis Bank to report net profit of Rs 6,492.2 crore, up 56 percent year-on-year (up 9.7 percent quarter-on-quarter). Net Interest Income (NII) is expected to increase by 39.7 percent year on year (YoY) (up 7.5 percent QoQ) to Rs 12,015.8 crore. Pre-Provision Operating Profit (PPOP) is likely to rise by 51.2 percent YoY (up 5.4 percent QoQ).
The brokerage house ICICIdirect expects Axis Bank to report a net profit of Rs 4,959.2 crore up 20.4 percent year on year (down 15.3 percent quarter on quarter). Net Interest Income (NII) is expected to increase 33.1 percent YoY (up 2.5 percent QoQ) to Rs 11,742.8 crore. Pre Provision Operating Profit (PPOP) is likely to rise by 34 percent YoY (down 6.6 percent QoQ) to Rs 8,667 crore.
Kotak Institutional Equities said that “4QFY23 is not a representative of the underlying business as it includes the integration of Citi's business in the portfolio from March, 2023. The bank would be reporting a loss to mark down the goodwill on this acquisition. We expect a like-for-like loan growth to be similar to industry average at ~15% YoY. We are building NIM to be flat QoQ but the variables driving the actual NII performance would be challenging to forecast this quarter.”
“We expect slippages of ~Rs40 bn (~2% of loans) mostly led by small ticket loans. Expect strong commentary on asset quality performance and we see an improvement in NPL ratios aided by stronger recovery/upgradations. We should expect the bank to make higher provisions for expenses pertaining to the merger as well. Citi integration, near term growth trends and progress of NIM would be the key discussion areas for the quarter.”
Acquisition of Citibank’s retail business
In March 2023, Axis Bank said it had completed the acquisition of Citibank’s retail business in India for a final cash consideration of Rs 11,603 crore. Last year, the lender agreed to purchase Citibank’s India Consumer Business from Citibank NA (acting through its branch in India) and the NBFC Consumer Business from Citicorp Finance (India) Limited (CFIL).
Axis, which has a retail book of nearly Rs 4 lakh crore, has acquired about 3 million unique customers of Citibank India, seven offices, 21 branches and 499 ATMs across 18 cities. Citi’s retail book is nearly Rs 68,000 crore in size, of which retail loans account for Rs 28,000 crore. With 1.2 million bank accounts, the total Indian business contributes 1.5 percent in profit to the lender’s global book.
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