Private sector lender Axis Bank has reported 131% year-on-year growth in net profit to ₹1,681 crore for the quarter ended December 31 on the back of healthy growth in core and non-core income.
Net interest income, the difference between interest earned and interest expended, grew by a healthy 18% to ₹5,604 crore while non-interest income grew by 54% to ₹4,001 crore.
Non-interest income was boosted as the bank recovered ₹998 crore in the third quarter, largely comprising two accounts from the prudentially written-off pool, compared with ₹40 crore a year earlier.
The lender also gained ₹342 crore by selling stake in two strategic investments during the quarter. The trading profits for the quarter grew by 90% to ₹379 crore during the period under review.
“This was a quarter of strong profitability,” said Jairam Sridharan, chief financial officer, Axis Bank. “This is the highest profit after tax we have in the last 11 quarters.”
NIM strengthens
“Net interest margin for the quarter was 3.47%, rising 11 bps quarter-on-quarter. Of these, 5 bps come from the one-off recovery during the course of the quarter. Even without that, NIM has strengthened during the quarter,” he said.
Asset quality also improved sequentially as the gross non-performing asset(NPA) ratio stood at 5.75% as at December end, compared to 5.96% in end-September, but higher than 5.28% reported a year ago.
Fresh slippages to bad loans have been contained with the bank seeing ₹3,746 crore loan turning bad during the quarter as compared to ₹4,428 crore in the year ago period and ₹2,777 crore in the second quarter.
Corporate lending slippages were ₹1,887 crore and 98% of this came from BB rated and below accounts. The bank’s BB and below rated book stood at ₹7,645 crore.
The bank reported ₹225 crore of divergence in NPA classification for the previous financial year.
