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.
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.”
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Research Analyst: Bavadharini KS