Axis Bank, the country’s third largest private lender, reported an 18 per cent rise in net profit, at ₹1,667 crore, for the first quarter ending June 30, 2014 on the back of lower provisions and stable interest income.
However, the drop in other income, a rise in operating expenses and bad loans limited the bank’s profitability.
Net interest income, the difference between interest earned and expended, increased by 16 per cent to ₹3,310 crore as compared to ₹2,865 crore in the corresponding quarter a year ago.
On the other hand, non-interest income declined marginally by 5 per cent to ₹1,691 crore from ₹1,781 crore last year.
“As the corporate pick up was low, we received less fee income from debt syndication and other services,” said Somnath Sengupta, Executive Director and Head - Corporate Centre.
Further, bad loans or non-performing assets worsened as gross NPA ratio increased to 1.34 per cent as on June 30, 2014 as against 1.10 per cent as on June 30, 2013.
Slippages and restructured loan book in the reporting quarter increased by ₹626 crore and 480 crore respectively.
Outlook “The corporate book should see pick up in the later part of the year as the economy revives…We would see loan growth higher than 20 per cent,” Sengupta added. The Axis Bank scrip ended almost flat at ₹2017.60, lower by 0.27 per cent over the previous close even as BSE-benchmark Sensex ended 310 points higher at day’s close.