Axis Bank: Axis Bank net surges 66% in Q2, asset quality improves


Mumbai: Axis Bank’s consolidated net profit in the second quarter climbed 66%, driven by growth in both interest and non-interest incomes, even as provisions dropped in response to improving asset quality at the country’s fourth most valued private lender.

Consolidated net profit increased to ₹5,625 crore in the quarter ended September, from ₹3,383 crore a year earlier.

CEO Amitabh Chaudhry said strong profitability, adequate capital and good prospects for growth mean the bank is in no hurry to raise money to fund its acquisition of Citibank’s retail business announced earlier this year.

“We have now delivered more than 15% return on equity for the last two quarters, we now want it to be sustainable,” Chaudhry said. “We expect to complete the Citi acquisition by the end of the fiscal or the first quarter of the next fiscal and depending on when we complete it, we will think about raising funds. The strong profits have given us the luxury of time.”

He added that the bank need not expand its capital base for financing the buyout of Citi’s retail business locally.

“Our core Tier I capital is more than 15% and our calculations are that 177 basis points of it will be used for the acquisition,” Chaudhry said. “This gives us enough room according to our internal benchmarks; so there is no hurry to dilute shareholder returns.”

In March, Axis said it will pay Citibank approximately $1.6 billion for the acquisition of its consumer business in India. The deal has received the competition commission’s approval and is on track to be completed in the quarter ended March 2023, Chaudhry said.

In the quarter ended September 2022, the bank recorded a 22% growth in retail loans and 9% growth in corporate loans. Mid-corporate, small, medium and micro enterprises now constitute 20% of the bank’s loan book, up 542 bps in the past two years.

Consolidated other income increased 4% to ₹4,476 crore, led by a 20% growth in fee income, especially retail fees.

The bank issued a record 1.04 million new credit cards in the quarter, gaining an incremental expenditure market share of 13% in the past nine months. The rise in fee income made for a ₹86-crore trading loss during the quarter as compared to trading gains of ₹473 crore a year ago.



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