Axis Bank Q3 net profit tripled

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Axis Bank’s consolidated net profit nearly tripled to Rs 3,973 crore in the December quarter.

On an isolated basis, the third-largest lender in the private sector posted a profit after tax of Rs 3,614.24 crore on Monday, up from Rs 1,116 crore in the year-ago period and Rs 3,133 crore in the September quarter.

The bank’s principal interest income rose 17 percent to Rs 8,653 crore on the back of 17 percent growth in loans.

Its non-interest income rose 15 percent to Rs 3,344 crore. Retail fees grew by 16 percent, which is now 65 percent of revenue.

The bank’s total deposits fell to Rs 1,334.83 crore from Rs 3,757.20 crore in the year-ago period, leaving additional provisions of over Rs 5,000 crore untouched.

The Chief Executive and Managing Director said that the reduction in credit costs was a precautionary measure taken by the government and the RBI to restructure their accounts or take out loans under the Emergency Credit Line Guarantee Scheme (ECGLS). To assist companies under pressure in the context of contagious lockdowns.

The slippage was taken and paid for in the bank accounts and then recovery efforts were started from the slipped accounts, he told reporters.

Puneet Sharma, its chief financial officer, said it expects more moderation in credit spending as the share of wholesale stressed accounts declined by 2.58 percent year-on-year to 0.44 percent in the December quarter.

The bank has witnessed rapid growth in credit card issuance, but like its peers, it has reported a decline in the revolver ratio on credit cards, which has led to a decline in revenue from the segment. However, Sumit Bali, head of retail lending, stressed that the credit card business will continue to be lucrative and will continue to acquire customers.

Going forward, Bali said the unsecured business will grow faster than the secured business and the bank will see a slight increase in the share of risky loans. He said the bank was more confident about unsecured loans as concerns related to Covid were allayed and economic growth was accelerating.

When asked about City India’s interest in its retail portfolio, Chaudhary said it was an “ongoing process” and declined further comment. Media reports call the lender to be a pioneer in taking over the American borrower’s retail business.

On Monday, the bank script fell 1.16 percent to close at Rs 704.35 on the BSE, against the benchmark 2.62 percent correction.

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