Axis Bank Q2 net rises 22% YoY, aided by other income

India's third largest private sector lender Axis Bank   on Monday reported 22% year-on-year rise in its second quarter (July-September) net profit to Rs 1,124 crore, boosted by growth in loans and other income.

Net interest income (NII) or the difference between interests earned and paid out, upped by 16% y-o-y to Rs 2,327 crore during the quarter. Other income shot up 29% to Rs 1,593 crore during the same period.

The quarterly numbers were slightly above the market expectations. A CNBC-TV18 poll estimated net profit at 21% and NII at 15%.

"The main business segments driving fee growth during the quarter were retail banking, which grew 43% y-o-y and large and mid-corporate banking which increased 15% y-o-y. SME and agricultural banking fees picked up 17% y-o-y in the quarter. Trading profits of the bank were Rs 207 crore during Q2FY13," the bank said in a press statement.

The bank's loan book expanded nearly 23% y-o-y to Rs 1.72 lakh crore. This pace of credit escalation is higher than the average industry credit growth projected at 17% by the Reserve Bank of India in 2012-13. Axis increased its share of retail lending (loans to individuals) to 26% of the total book as against 21% in Q2, FY12.

However, the higher loan growth came at the cost some asset quality erosion. The lender's gross non-performing asset (NPA) ratio worsened to 1.10% as against 1.06% in April-June quarter and 1.08% in Q2, FY12. Net NPA ratio too rose slightly from 0.31 to 0.33% sequentially.

The bank made provisions of Rs 509 crore as compared with Rs 259 crore in the previous quarter.

"The Bank restructured assets aggregating Rs 323 crore during Q2FY13. The cumulative value of assets restructured till 30th September 2012, stood at Rs 4,068 crores constituting 2.04% of gross customer assets," Axis Bank said.

Here, it is noteworthy that the private sector lender of late, figured in some moderate to big restructuring cases in consortium of lenders. Some of those loan defaults include Deccan Chronicle, Seven Hills Hospital, ICOMM Tele and others. Among private banks, it apparently emerged as the lender with highest number of restructuring cases, so far.

Total deposit base rose more than 21% y-o-y to Rs 2.36 lakh crore wherein the current and savings account (CASA) ratio stood at 41%.Capital adequacy ratio declined to 12.99% versus 13.03% quarter-on-quarter.

Source: www.moneycontrol.com

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