Axis Bank Q1 net jumps 95%


Lender attributes increase in profit to sharp rise in trading income

Private sector lender Axis Bank reported a 95% increase in its net profit to ₹1,370 crore for the April-June quarter mainly due to sharp rise in trading income.

The trading profits for the first quarter stood at ₹832 crore as compared to ₹103 crore in the same period of the previous year.

Trading profit helped non-interest income to grow 32% on year to ₹3,869 crore, while fee income grew 26% to ₹2,663 crore.

The bank’s net interest income (NII) grew 13% on year to ₹5,844 crore while net interest margin was at 3.40%.

Asset quality was maintained with gross NPA and net NPA ratio were at 5.25% and 2.04% as on end June, as against 5.26% and 2.06% as on March 31, 2019.

Slippages were higher at ₹4,798 crore during the quarter as compared to ₹3,012 crore in the previous quarter and ₹4,337 crore in the year ago period. The NPA ratios fell for the fifth straight quarter, the bank said. “During quarter one, our operating performance was strong, our growth metrics were healthy, asset quality metrics continue to improve and we have further strengthened our balance sheet by improving provision coverage,” Amitabh Chaudhry, MD & CEO, Axis Bank, said in the post-earnings conference call.

Provision coverage, as a proportion of gross NPAs including prudential write-offs, stood at 78%, up from 77% in Q4FY19.

The bank has made an additional provision of ₹2,358 crore towards various risk contingencies, over and above the regular provisioning requirement, which is not counted towards provision coverage ratio calculations.

“We have also laid out a goal to reduce cost-to-asset ratio to 2% in the course of 2022 and this quarter, an important step forward. Our cost to asset fell to 2.08% during the quarter,” Mr. Chaudhry said.

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Printable version | Dec 9, 2019 7:31:07 AM |

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