India's third largest private sector lender Axis Bank
's first quarter (April-June) net profit rose more than 22% year-on-year
to Rs 1,150 crore, boosted by a robust loan book that grew nearly 30% y-o-y to
Rs 1.71 lakh crore.
A poll estimate by CNBC Awaaz had showed 20% rise in net
profit on an average. Even if, the Q1 net was slightly higher than the
expectation but Axis Bank shares fell more than 2% in the late afternoon trade
on asset quality concern.
During the quarter, the net interest income or the
difference between interest earned and paid out increased sharply by about 27%
to Rs 2,180 crore. The net interest margin (NIM) fell by 18 basis points to
3.37% sequentially. Fee income upped 9%
y-o-y to Rs 1,155 crore.
The bank has increased its share of retail loans to 24% of
the total loan book as compared with 22% earlier. It has also brought down its
credit exposure to small and medium enterprises to around 13% of the total
loans from 15% earlier.
The lender's net non-performing asset (NPA) ratio increased
to 0.31% from 0.25% in January-March quarter. Similarly, gross NPA ratio too
rose to 1.06% as against 0.94% sequentially. This was indicative of some amount
of stress in its assets (loans).
Investors were indeed jittery about its asset quality as the
bank so far, has not announced any major loan default case, despite the fact
that the majority of banks have been suffering from asset stress since the last
few quarter. In the last one year, apprehensive investors chose to shun Axis
Bank shares. They tanked more than 18% as against a fall of just 5% of the
broader index Bank Nifty.
The lender restructured assets of Rs 628 crore taking the
total value to Rs 3,827 crore, which is equivalent to nearly 2% of gross
customer assets. Large and mid size companies formed most of the restructured
loans to the tune of 80%. Moreover, it added fresh slippages of Rs 456 crore
while upgradations were only Rs 62 crore. This has cumulatively led to the rise
of NPAs.
When a loan account loses its status of standard asset to
slip into non-performing asset territory, it is called slippage. Upgradation
happens when a defaulting loan account repays his all previous dues (read full
recovery) and starts repaying loan as usual.
Meanwhile, deposits expanded 21% y-o-y to Rs 2.23 lakh
crore. The number of savings account grew 26% to Rs 124 lakh.
Capital adequacy ratio declined to 13.03% in Q1, FY13 as
against 13.66% in Q1, FY12.
Source: www.moneycontrol.com
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
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