Axis Bank: Axis Bank Q2 net profit rises 10% to Rs 5,864 crore

Mumbai: Axis Bank has reported a 10% year-on-year increase in net profit to ₹5,864 crore, mainly aided by growth in interest income. During the same quarter a year ago, profit was at ₹5,329 crore. The bank’s net interest income (NII), which is the difference between interest earned and expended, increased 19% YoY and 3% QoQ to reach ₹12,315 crore.

“With the upcoming festivities, we are already seeing a surge in demand, which augurs well for business,” said Amitabh Chaudhry, managing director, Axis Bank. “We are looking at steady growth for all major business verticals of the bank.”

Net interest margin (NIM) for the same period stood at 4.11%, showing a 15 basis point (bps) increase YoY and a 1 bps increase QoQ.

Cost of funds has gone up 14 basis points and the bank has been able to offset this rise by higher yield on assets. The bank saw yield on interest earning assets also go up by 14 basis points. Therefore, there was a full offset.

The marginal cost of funds for the bank has stabilised while some deposits will continue to reprice over the next few quarters.

“We have multiple structural levers in our NIM journey to optimise NIM which is book mix, product mix, currency mix and we feel comfortable with where we are on cost of funds,” the management said.

The bank’s balance sheet expanded by 13% YoY to ₹13.38 lakh crore as of September 30, 2023. While total deposits grew 18% YoY increase, it grew by a 1% QoQ increase on a period-end basis. The share of CASA (Current Account and Savings Account) deposits in total deposits reached 44%.

Axis Bank’s advances grew 23% YoY and 5% QoQ to ₹8.97 lakh crore mainly due to growth in domestic loan growth. The bank’s domestic net loans grew by 26% YoY and 5% QoQ.

In the retail lending segment, Axis Bank saw a 23% YoY growth and a 4% QoQ increase, with retail loans accounting for 58% of the net advances.

On the unsecured loan growth, Chaudhry said that the loan book is growing well for them and that the bank is staying away from sub ₹50,000 loans as stress could be building in this sub category for the industry.

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