Earnings Review
Axis Bank's net profit for Jan-Mar tad down on year as provisions rise
This story was originally published at 18:59 IST on 24 April 2025
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By Kshipra Petkar
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--Axis Bank Jan-Mar net profit INR 71.18 bln
--Analysts saw Axis Bank Jan-Mar net profit at INR 67.13 bln
--Axis Bank Jan-Mar net profit INR 71.18 bln vs INR 71.30 bln year ago
--Axis Bank Jan-Mar total income INR 380.22 bln vs INR 359.90 bln year ago
--Axis Bank gross NPA ratio 1.28% as on Mar 31 vs 1.46% quarter ago
--Axis Bank net NPA ratio 0.33% as on Mar 31 vs 0.35% quarter ago
--Axis Bank Jan-Mar provisions INR 13.59 bln vs INR 11.85 bln year ago
--Axis Bank Basel-III capital adequacy ratio 17.07% as on Mar 31
--Axis Bank FY25 net profit INR 263.73 bln vs INR 248.61 bln year ago
--Axis Bank FY25 total income INR 1.479 tln vs INR 1.318 tln year ago
--Axis Bank to pay INR 1 per share dividend
--Axis Bank reversed excess provision of INR 8.01 bln in Jan-Mar
--Axis Bank Jan-Mar NIM 3.97% vs 3.93% qtr ago, 4.06% year ago
--Axis Bank Jan-Mar net interest income INR 138.11 bln, up 6% on year
--Axis Bank: Jan-Mar average LCR around 118%
--Axis Bank: Hold excess SLR bonds worth INR 1.15 tln
--Axis Bank: Issued 800,000 new credit cards in Jan-Mar
--Axis Bank: Total deposits at INR 11.73 tln as on Mar 31, up 10% on year
--Axis Bank: Net advances at INR 10.41 tln as on Mar 31, up 8% on year
--Axis Bank: Retail advances at INR 6.23 tln as on Mar 31, up 7% on year
--Axis Bank: SME advances at INR 1.19 tln as on Mar 31, up 14% on year
--Axis Bank: Corporate advances at INR 2.99 tln as on Mar 31, up 8% YoY
--Axis Bank: CASA ratio at 41% as on Mar 31 vs 39% as on Dec 31
--Axis Bank: Jan-Mar cost of deposits 5.19% vs 5.13% qtr ago, 5.06% year ago
--Axis Bank: Jan-Mar cost of funds 5.50% vs 5.46% qtr ago, 5.43% year ago
--Axis Bank: Around 72% of retail loan book is secured
--Axis Bank: Jan-Mar retail credit card spends INR 430.84 bln, up 4% YoY
--Axis Bank: Jan-Mar credit cost 0.84% vs 1.28% qtr ago, 0.68% year ago
--Axis Bank: Jan-Mar fresh slippages INR 48.05 bln vs INR 34.71 bln year ago
--Axis Bank board OKs raising up to INR 350 bln via debt
--Axis Bank: Jan-Mar recoveries, upgrades INR 27.90 bln vs INR 21.55 bln year ago
--Axis Bank board OKs raising up to INR 200 bln via equity
--Axis Bank: Jan-Mar loan write offs INR 33.75 bln vs INR 20.82 bln year ago
--Axis Bank: Provision coverage ratio at 75% as on Mar 31
--Axis Bank board OKs raising borrowing limit to INR 3 tln
By Kshipra Petkar
MUMBAI – Axis Bank's net profit for the March quarter fell marginally on year due to a rise in provisions. The private sector bank reported a net profit of INR 71.18 billion for Jan-Mar, down 0.2% on year. Analysts had estimated the net profit at INR 67.13 billion.
Provisions of the bank were up 14.7% on year at INR 13.6 billion in Jan-Mar. However, on a quarter-on-quarter basis, the provisions were down 37%, which helped the net profit rise nearly 13% quarter-on-quarter. For 2024-25 (Apr-Mar), the net profit stood at INR 263.73 billion.
"Pursuant to the RBI notification dated 29th March 2025, on revised norms for Government Guaranteed Security Receipts, in Jan-Mar the Bank has reversed excess provision of ~800.65 crores (INR 8 billion) to the profit and loss account held on loans transferred to NARCL," the bank said in its notes.
The asset quality of the bank improved during the quarter. The gross non-performing asset ratio fell to 1.28% as on Mar 31 from 1.46% a quarter ago, and the net NPA ratio stood at 0.33% as on Mar 31 from 0.35% a quarter ago.
The bank's total income rose nearly 6% on year and 3% on quarter to INR 380.22 billion. For the financial year ended March, total income stood at INR 1.48 trillion. Net interest income grew 6% on year to INR 138.11 billion. The net interest margin for Jan-Mar moderated by 4 basis points on quarter to 3.97%. For the financial year ended March, the net interest margin was 3.98%.
"The bank prioritised profitability over growth, considering the uncertain macros and tight liquidity environment dominating most of FY25, while continuing to meaningfully invest in making the franchise more sustainable. As we enter FY26, we believe the operating environment is improving, which should help us drive both growth and profitability," Managing Director and Chief Executive Officer Amitabh Chaudhry said in the press release.
The bank's balance sheet grew 9% on year and stood at INR 16.09 trillion as on Mar. 31. The growth of deposits was higher compared to advances growth. Deposits were up 10% on year, and advances were up 8% on year.
Out of the total deposits, the share of current account savings account deposits in total deposits surged to 41% from 39% at the end of Oct-Dec. Current account deposits grew 6% on year, while savings account deposits were up only 1%. Term deposits grew 14% on year to INR 6.69 trillion. The share of retail deposits fell to 56% from 57% a quarter ago and 58% a year ago. The cost of deposits of the bank increased to 5.19% from 5.13% a quarter ago and 5.06% a year ago.
Within overall advances of the bank, the retail loan book grew 7% on year, the small and micro small and medium enterprise book grew 14% on year, and the corporate book was up 8% on year. The cost of funds increased marginally to 5.50% from 5.46% a quarter ago. The share of secured retail loans was 72%, with home loans comprising 27% of the retail book, the bank said in the press release.
"Home loans grew 1% YOY, personal loans grew 8% YOY, credit card advances grew 4% YOY, small business banking (SBB) grew 17% YOY and 4% QOQ; and rural loan portfolio grew 7% YOY and 5% QOQ," the release said. Microfinance loans were around 2.1% of retail loans, of which 1% is retail microfinance loans. In the latest quarter, the bank issued 800,000 new credit cards. The bank said that 100% of personal loans and 79% of the credit cards portfolio were to the salaried segment.
On slippages, the gross slippages fell to 1.90% from 2.13% in the previous quarter and net slippages stood at 0.81%, against 1.40% a quarter ago. The annualised credit cost stood at 0.84% in Jan-Mar.
In Jan-Mar, the bank reported fresh slippages of INR 48.05 billion, higher than INR 34.71 billion a year ago. Recoveries and upgrades were at INR 27.90 billion in Jan-Mar, compared to INR 21.55 billion a year ago. In the reporting quarter, the bank wrote off loans worth INR 33.75 billion compared to INR 20.82 billion a year ago. The bank's provision coverage ratio was at 75% as on Mar. 31.
The consolidated liquidity coverage ratio stood at 118%, higher than the regulatory requirement of 100%. The bank holds excess statutory liquidity ratio of INR 1.15 trillion.
In a separate release, the bank said its board has approved raising up to INR 350 billion through debt instruments and up to INR 200 billion through equity. The board has also increased the borrowing limit to up to INR 3 trillion. The Basel-III capital adequacy ratio stood at 17.07% as on Mar. 31.
The board has recommended dividend of INR 1 per share. On the National Stock Exchange, shares of Axis Bank closed flat at INR 1,207.10 on Thursday. The earnings were announced after market hours. End
Edited by Avishek Dutta
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