Axis Bank, one of the largest private sector lenders in India, reported on April 28 a massive 54 percent year-on-year growth in standalone profit for the quarter ended March 2022, largely driven by significant fall in provisions and improved asset quality performance.
Profit increased to Rs 4,117.8 crore during the quarter, compared to Rs 2,677 crore in same period last year, the bank said in its BSE filing.
Net interest income, the difference between interest earned and interest expended, grew by 16.7 percent year-on-year to Rs 8,819 crore with credit growth of 15 percent and deposits growth of 19 percent for March 2022 quarter.
Axis Bank said advances at Rs 7.07 lakh crore as of March 2022 grew 15 percent YoY, with retail loans (which accounted for 57 percent of net advances) growth at 21 percent YoY and the growth in corporate loan book was just 4 percent compared to corresponding period last fiscal.
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Provisions and contingencies in Q4FY22 declined sharply by 54.4 percent to Rs 987.2 crore compared to corresponding period last fiscal, while the sequential decline was 26 percent.
The bank said it has not utilized Covid provisions during the quarter. It holds cumulative provisions (standard + additional other than NPA) of Rs 12,428 crore at the end of Q4FY22.
Credit cost for the quarter ended March 2022 stood at 0.32 percent, declining by 116 bps YoY and 12 bps QoQ, it added.
Its provision coverage ratio, as a proportion of gross NPAs stood at 75 percent as of March 2022, improving from 72 percent in previous quarter.
Axis Bank showed better improvement on the asset quality front, with gross non-performing assets as a percentage of gross advances declining 35 bps sequentially to 2.82 percent in quarter ended March 2022, while net NPA ratio in the same period dropped 18 bps to 0.73 percent.
"Gross slippages during the quarter were Rs 3,981 crore, which were lower compared to Rs 4,147 crore in Q3FY22. Recoveries and upgrades from NPAs during the quarter were Rs 3,763 crore, which resulted into net slippages in NPAs (before write-offs) for the quarter at Rs 218 crore, down sharply compared to Rs 860 crore in previous quarter," said the private sector lender.
Recoveries from written off accounts were Rs 719 crore. Hence on aggregate, "the slippages were lower than recoveries, upgrades and collections from written off accounts," said the bank, which in the quarter wrote off NPAs aggregating Rs 1,696 crore.
The bank recorded a 19.3 percent year-on-year growth in non-interest income (other income) at Rs 4,223 crore for March quarter, with fee income, which contributed the most to other income, grew by 11 percent in the same period.
Pre-provision operating profit for the quarter at Rs 6,466 crore increased by 12.7 percent compared to year-ago period, with core operating profit rising 9 percent in the same period.In the full year, Axis Bank clocked 98 percent growth in profit at Rs 13,025 crore and 13 percent increase in net interest income compared to the previous year.