Axis Bank, India’s third-largest private sector bank, reported a 19 per cent increase in net profit in the first quarter ended June 30, 2015, on the back of healthy growth in net interest income and non-interest income.
Net profit in the reporting quarter stood at ₹1,978 crore (₹1,667 crore in the year-ago period).
The profitability comes despite a sharp increase in provisions (other than tax) and contingencies (net) at ₹1,122 crore (₹387 crore).
Net interest income (the difference between interest earned and expended) was up 22.53 per cent at ₹4,056 crore. Other income (comprising fee, trading profit and miscellaneous income) for the quarter recorded a strong 36 per cent year-on-year growth at ₹2,298 crore. During the quarter, trading profit of the bank came in at ₹646 crore (₹260 crore).
As on June-end 2015, net interest margin was lower at 3.81 per cent (3.88 per cent as on June-end 2014).
Deposits, year-on-year, were up 13 per cent at ₹3,07,784 crore. Advances increased by 23 per cent to ₹2,72,004 crore. As on June-end 2015, CASA (current account, savings account) deposits constituted 43 per cent (42 per cent as on June-end 2014) of total deposits.
Retail advances grew 26 per cent y-o-y to ₹1,15,204 crore. Corporate credit grew 27 per cent to ₹1,29,566 crore. SME advances (excluding non-retail agriculture segment) grew 11 per cent to ₹38,242 crore.
Sanjeev Gupta, ED and CFO, said, “Deposit rates continue to go down and with expectations of monsoon picking up, we are hopeful that overall there is scope for further rate (lending) cuts….Credit growth is likely to be at 18-20 per cent this year.”
Bad loans up a tad Gross non-performing assets (GNPAs) and net NPAs edged up to 1.38 per cent (1.34 per cent) and 0.48 per cent (0.44 per cent), respectively.
As on June-end 2015, the bank’s GNPA was ₹4,251 crore against ₹4,110 crore as on March-end 2015. The CFO said the bank has got approval (board) to mop up ₹15,000 crore through issue of bonds to fund infrastructure and affordable housing.
Axis Bank share ended at ₹580.95, down 0.50 per cent, on the BSE on Friday.