Higher interest income and retail loan growth helped Axis Bank post a 22 per cent rise in net profit at Rs 1,409 crore in the first quarter ended June 30, 2013.
The çountry’s third largest private bank had reported a net profit of Rs 1,154 crore in the year-ago period.
Net interest income (the difference between interest earned and expended) grew 31 per cent to Rs 2,865 crore, while other income was up 32 per cent to Rs 1,761 crore.
The percentage of gross non-performing assets (NPAs) edged up marginally to 1.10 per cent from 1.06 per cent in the same quarter last year. Net NPAs increased to 0.35 per cent from 0.31 per cent.
Following a 19 per cent year-on-year increase in bad loans, the bank’s provisions towards NPAs jumped to Rs 572 crore, compared with Rs 261 crore in the same quarter last year.
Total advances grew 16 per cent YoY to Rs 1.98 lakh crore, while deposits grew at a slower pace of 7 per cent to Rs 2.38 lakh crore as on June 30, 2013.
The retail loan segment, which accounts for 29 per cent of the total loan book, grew 40 per cent YoY, driven by growth in mortgage and home loans. However, corporate loan growth was below 10 per cent.
“The environment is still challenging and hence, the restructuring pipeline will continue to grow at the current pace,” said Somnath Sengupta, Executive Director of the bank.
During the quarter, restructured assets stood at Rs 686 crore, compared with Rs 372 crore in the year-ago period.
With higher-than-expected profit figures, the Axis Bank scrip ended 3.83 per cent higher at Rs 1,238.40 on the Bombay Stock Exchange.
Cobrapost fallout
On the recent allegations of money laundering by online magazine Cobrapost , the bank has restricted for a year the redemption benefits entitled to some employees identified in the undercover investigation.
The bank issued warnings to some employees after the Reserve Bank of India fined 25 banks, including Axis Bank, for violating certain know-your-customer and anti-money laundering norms.