Axis Bank eyes bigger growth share in mid-corporates, SME segment

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

The country's third largest private sector lender Axis Bank aims to focus on small companies as a key growth driver, said a top official.

Growth in the corporate loan book is likely to remain strong in the mid-corporates and small- and medium-sized enterprises, said Puneet Sharma, Chief Financial Officer of Axis Bank.

“Within corporates as we have called out, our growth will continue to be strong in our preferred segments such as mid-corporates, MNC, and SME,” Sharma said during a post-result press conference.

Sharma added that the bank will look at quality growth in the large corporate segment as well as demand picks up.

The bank’s net advances grew 15 percent on-year to Rs 7.62 lakh crore as on December 31, 2022.

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

Retail loans grew 17 percent on-year and 1 percent on-quarter to Rs 4.3 lakh crore and accounted for 56 percent of the net advances of the Bank. The share of secured retail loans was 79 percent, with home loans comprising 34 percent of the retail book.

The SME book of the bank remains well diversified across geographies and sectors, and grew 24 percent on-year to Rs 82,190 crore.

Corporate loan book grew 8 percent on-year to Rs 2.51 lakh crore. Mid-corporate book grew 42 percent.

The bank’s balance sheet grew 10 percent on-year and stood at Rs 12.24 lakh crore as on December 31, 2022.

Also read: Axis Bank Q3 results | Here are top five highlights

Sharma further said that the bank is now focussed on delivering an 18 percent Return on Equity (ROE), tapping the potential growth verticals.

“The primary focus is to ensure that we deliver ROE at 18 percent,” Sharma said

The bank reported a net profit of Rs 5,853 crore for the December quarter (Q3FY23), a growth of 62 percent year-on-year, beating street estimates comfortably.

The private sector lender's net interest income rose 32 percent year-on-year to Rs 11,459 crore on the back of a strong 15 percent loan growth and an expansion in net interest margins.

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), the core income a bank earns through lending, was expected to grow 25 percent to Rs 10846 crore, the poll showed.