Axis Bank Q2 Results: Net profit rises 18% to ₹6,917.57 crore on robust credit demand, NII up 10% YoY

Axis Bank Q2 Results: Axis Bank announced its July-September quarter results for fiscal 2024-25 (Q2FY25) on Thursday, October 17, reporting a rise of 18 per cent in standalone net profit at ₹6,917.57 crore, compared to ₹5,863.56 crore in the corresponding period last year. The net interest income (NII)-the difference between interest earned and paid of India's fourth-largest private lender by market value, rose 10 per cent year-on-year (YoY) to ₹1,3483.2 crore, compared to ₹1,2314.56 crore in the year-ago period.

The net interest margin (NIM), a key gauge of profitability for lenders, shrunk by four per cent in the second quarter of the current fiscal from 4.11 per cent last year and 4.05 per cent in the previous quarter. Chief Financial Officer (CFO) Puneet Sharma said the sequential decline in NIM was primarily due to a one-time tax gain in the preceding June quarter.

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Axis Bank Q2 Results: Key Metrics

The private-sector bank said its margin, excluding the one-time impact, was broadly maintained as deposit costs remained stable compared with the prior quarter. The gross non-performing assets ratio, a key gauge of lenders' asset quality, improved to 1.44 per cent at the end of September, compared with 1.54 per cent three months earlier and 1.73 per cent a year ago.

Net loans grew 11 per cent, while total deposits rose 14 per cent in the second quarter. The bank managed a 14 per cent growth in total deposits and clarified that it is not using price as a lever to attract liabilities.

Axis Bank said in a regulatory filing that its total income increased to ₹37,142 crore during the quarter under review, up from ₹31,660 crore in the same period last year. The bank earned an interest income of ₹30,420 crore during the quarter, up from ₹26,626 crore a year ago.

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Axis Bank chief executive officer (CEO) and managing director Amitabh Chaudhry told reporters that the current market conditions are "tough," and the bank is facing factors like worsening asset quality, especially on the unsecured loans front, and elevated deposit rates despite the excess liquidity conditions.

CFO Puneet Sharma said the overall slippages came to over ₹4,400 crore, and the retail book contributed ₹4,013 crore in non-performing additions. He said, without specifying the number, that a bulk of the retail contribution was from unsecured loans.

The bank reported a 22 per cent growth in the credit card book and a 23 per cent growth in personal loans. The bank has made an additional provision of ₹520 crore on a prudential basis, choosing to strengthen the balance sheet by reporting lower profit growth. Axis Bank shares closed 1.74 per cent down at ₹1,132.15 apiece on the BSE, compared to a 0.61 per cent correction on the benchmark.

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