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Axis Bank Q1 Results Fy22-2023

26 July 2022

One of India’s leading banks, Axis Bank declared its quarterly financial results for the first quarter of FY23 on 25th July 2022. It reported a whopping 85.86% YoY (year on year) increase in its consolidated net profit after tax (PAT), rising to Rs. 4,380 crore in Q1 FY23 from the Rs. 2,356 crore the bank reported in Q1 FY22. 

This massive jump can be attributed to a 21% YoY and 6% QoQ (quarter on quarter) increase in the net interest income (NII) earned by the bank. At the same time, the net interest margin (NIM) for Q1 FY23 stood at 3.60%, up 14 bps YoY and 11 bps QoQ. The fee income of the bank grew 34% YoY, in which granular fee constituted 93% of overall fees. Moreover, the retail fee grew 43% YoY.

The core operating profit of the banking and financial company increased 17% YoY and 5% QoQ. The consolidated annualised ROE (return on equity) stood at 15.66%, up 587 bps YoY, of which the bank’s subsidiaries contributed 59 bps. 

As of the current quarter, the retail loans constitute 59% of the loan book for Axis Bank that saw a 25% YoY. Domestic loan book in total grew 15% YoY while loans extended to SMEs in the country increased 27% YoY. 

Looking at the deposits with the bank on a quarterly average balance (QAB) basis, there was an increase of 14% YoY and 2% QoQ. The QAB of savings accounts grew 16% YoY and 4% QoQ. Similarly, the QAB of current account deposits grew 15% YoY. In the quarter ended 30 June 2022, CASA (current account savings account) grew 16% YoY and 1% QoQ. The CASA ratio stood at 43%, up 53 bps YoY.

The gross non-performing assets (in %) of the bank stood at 2.76%, declining by 109 bps YoY and 6 bps QoQ. The net non-performing assets (in %) were reported at 0.64%, a decline of 56 bps YoY and 9 bps QoQ.

Axis Bank's basic earnings per share for the period stood at Rs. 14.27, rising 85.57% YoY from Rs. 7.69 in Q1 FY22. However, ahead of the result, the Axis Bank share closed in the red at Rs. 726.65, falling 0.56% from the previous day closing. 

Hits of Axis Bank Results

  • Consolidated net profit after tax (PAT) increased 85.86% YoY to Rs. 4.380 crore in Q1 FY23 from Rs. 2.356 crore  in Q1 FY22. 
  • Net interest income (NII) increased 21% YoY and 6% QoQ.
  • Net interest margin (NIM) stood at 3.60%, up 14 bps YoY and 11 bps QoQ. 
  • The fee income of the bank grew 34% YoY.
  • Core operating profit increased 17% YoY and 5% QoQ. 
  • ROE (return on equity) stood at 15.66%, up 587 bps YoY.
  • Overall capital adequacy ratio (CAR) including profit for Q1 FY23 stood at 17.83% with CET 1 ratio of 15.16%
  • The retail loans increased 25% YoY and those extended to SMEs increased 27% YoY.
  • On a QAB basis, savings account deposits grew 16% YoY and 4% QoQ and current account deposits grew 15% YoY.
  • CASA grew 16% YoY and 1% QoQ. 
  • The CASA ratio stood at 43%, up 53 bps YoY.
  • The gross non-performing assets of the bank stood at 2.76%, declining by 109 bps YoY and 6 bps QoQ. 

Segment-wise revenue under Axis Bank Q1 Results

  • Treasury: Revenue down by 5.41% YoY to Rs. 4,812 crore in Q1 FY23 from Rs. 5,087 crore in Q1 FY22. 
  • Corporate/Wholesale Banking: Revenue up by 21.25% YoY to Rs. 7,715 crore in Q1 FY23 from Rs. 6,363 crore in Q1 FY22.
  • Retail Banking: Revenue up by 18% YoY to Rs. 19,991 crore in Q1 FY23 from Rs. 16,943 crore in Q1 FY22.
  • Other Banking Business: Revenue up by 28.33% YoY to Rs. 693 crore in Q1 FY23 from Rs. 540 crore in Q1 FY22.

What the management says about Axis Bank Q1 Results

Amitabh Chaudhry, MD&CEO, Axis Bank said, “As an institution, we continue to make good progress despite the macroeconomic headwinds that pose a challenge at multiple levels, both domestically and to the larger global economy. We continue to strengthen our core, as we open up all doors of growth and development, keeping our priorities intact on building a nimble, smart and customer obsessed bank. One of the highlights for Axis Bank in the previous quarter was our acquisition of Citibank’s consumer business in India. We have filed for the due approvals and once they are in place, the integration process will pick up pace.”

Other things to know about Axis Bank

  • Approximately 0.99 million credit cards were issued in Q1 FY23, an incremental share of 17% for the last 6 months. Moreover, the spending was up by 96% YoY & 16% QoQ.
  • Axis Bank stood as the second largest player in Merchant Acquiring with a market share of 17%, an incremental share of 30% for the last 3 months.
  • The bank held a 16% market share in UPI transactions and a 22% share in P2M Acquiring (by throughput) in Q1 FY23. A dedicated IT cloud infrastructure built to exclusively handle high volume UPI transactions resulted in Axis Bank achieving one of the lowest decline rates as a remitter when compared to peer banks.

To read the RA disclaimer, please click here
Research Analyst: Bavadharini KS

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