Axis Bank Reports Impressive 23% Surge in Standalone Profit for Q1

Axis Bank has demonstrated resilience in its recent financial performance, reporting a 23% year-on-year increase in standalone net profit for the June quarter, amounting to ₹7,114 crore, up from ₹5,806 crore a year prior. This improvement was primarily driven by a significant reduction in provisions and contingencies, which decreased by 44% to ₹2,223 crore. Despite a modest growth of 1.3% in pre-provision operating profit, reaching ₹11,659 crore, the bank’s strategic provisioning has bolstered its bottom line, illustrating its capacity to navigate potential risks effectively.

The bank recorded a net interest margin (NIM) of 3.46%, a contraction from 3.8% in the corresponding period last year. However, net interest income (NII) did increase by 8% year-on-year to ₹14,646 crore, supported by a robust 19% growth in gross advances, which totaled ₹12.62 lakh crore. This indicates strong demand for credit, reinforcing the bank’s position in a competitive market. On the funding side, deposits surged by 18% year-on-year to ₹13.7 lakh crore, reflecting a solid liquidity position that positions Axis Bank favorably for future growth.

While the bank’s other income suffered a 7% decline year-on-year, primarily due to a dramatic 62% drop in trading income to ₹537 crore, management has indicated a focus on leveraging liquidity from foreign currency non-resident (FCNR-B) deposits for expanding advances. Managing Director Amitabh Chaudhry emphasized the importance of this liquidity in supporting growth, although specific figures regarding the FCNR-B deposits raised were not disclosed. This strategic pivot towards deployment of funds may enhance the bank’s lending capabilities and overall profitability in the coming quarters.

Source: The Economic Times

(Expert Note: This report was prepared by the Wealthova team.)