Axis Bank reported a 25 per cent increase in net profit to Rs 920 crore in the July-September 2011 quarter against Rs 735 crore in the corresponding period last year.
Growth across all segments of business helped the bank post good results, said Mr Somnath Sengupta, Executive Director and Chief Financial Officer, Axis Bank.
Focus on core biz
“This was a good quarter as growth was well balanced. We will focus on core business going ahead,'' he said.
Credit growth will probably slow down for the banking sector, but Axis Bank will clock above average industry growth rate, he added.
Retail loans grew at a faster pace than corporate loans, as there was demand for home and auto loans.
Within the corporate loans segment, there was higher demand for working capital loans, while the demand for capital expenditure came from loans which were sanctioned earlier, Mr Sengupta said.
Non-performing assets increased due to slippages across all sectors. Going ahead, the bank would continue to focus on improving its credit quality, Mr Sengupta said.
Income from trading declined by 76 per cent to Rs 28 crore (Rs 108 crore).
Cost of funds increased, especially due to interest rates on term deposits going up in September. But it is not an alarming situation as liquidity is good.
The net interest margin improved over the preceding quarter as well as the corresponding year-ago period driven by stronger build up in CASA deposits, stable funding rates and a pick up in loan yields.
But the current level of NIM cannot be sustained and it will moderate. For the current fiscal the bank is targeting NIM in the 3.25 and 3.5 per cent range.
“Our ability to pass on further cost to borrowers will probably be limited. We will have to wait and watch,'' Mr Sengupta said.
H1 profit up 26%
For the six-month period ended September, the bank posted net profit of Rs 1,863 crore, up 26 per cent from Rs 1,477 crore in the corresponding period last year.
While capital adequacy ratio has dipped slightly, it is still comfortable and there is no immediate need for capital. The bank will look at raising capital only in the next financial year, Mr Sengupta said.