Axis Bank Q3 net profit grows 62% YoY to ₹5,853 crore, beats expectations even as provisions and slippages rise

Axis Bank Q3 net profit grows 62% YoY to ₹5,853 crore, beats expectations even as provisions and slippages rise
Axis Bank's net profit has increased 62% year-on-year to ₹5,853 croreBCCL
  • Axis Bank’s standalone Q3 net profit of ₹5,853 crore in Q3, registering a growth of 62% year-on-year and 9.8% sequentially.
  • The bank also reported an increase in provisions and net slippages during the December quarter, both on a YoY and sequential basis.
  • The bank’s loan portfolio grew faster than its deposits, while the cost of deposits rose for the fifth consecutive quarter.
Axis Bank on Monday reported a standalone net profit of ₹5,853 crore in Q3, registering a growth of 62% year-on-year and 9.8% sequentially, beating analyst expectations. Improved asset quality and margins aided bottomline growth even as provisions rose during the December quarter.

Axis Bank’s net interest income (NII) grew 32% YoY and 10.6% sequentially to ₹11,459 crore in Q3.

Its net interest margin (NIM) improved to 4.26% in Q3, as against 3.53% a year ago. In Q2 FY23, the bank’s NIM stood at 3.96%. NIM is a measure of how much a bank is earning as interest income from its customers versus how much it is paying on deposits.

Pre-provisioning operating profit (PPOP), or operating profit, in Q3 stood at ₹9,277 crore, up 58% YoY and 26% sequentially.

Asset quality witnessed an improvement, with gross non-performing assets (NPA) at 2.38% in Q3, significantly down from 3.17% a year ago. Net NPA also moderated to 0.47% as against 0.91% a year ago.


Provisions, however, went up both sequentially as well as on a YoY basis. In Q3 FY23, provisions stood at ₹1,438 crore, up from ₹550 crore in Q2 FY23, and ₹1,335 crore in Q3 FY22.

Alongside provisions, even net slippages increased during the December quarter to ₹1,719 crore. Net slippages stood at ₹557 crore in Q2 FY23, and ₹860 crore in Q3 FY22.

Net slippages is a measure of fresh additions to net NPA.

“Axis Bank has been steadily enhancing its capabilities, buoyed by good business growth and great partnerships. The Citi merger has been shaping very well, and we are extremely happy with the response we are getting from customers and employees alike,” said Amitabh Chaudhry, MD and CEO, Axis Bank.

Here’s Axis Bank’s Q2 in numbers:

ParticularsQ3 FY23Q2 FY23Q3 FY22
Total income₹26,892 crore₹24,180 crore₹21,101 crore
Net interest income₹11,459 crore₹10,360 crore₹8,653 crore
Net profit₹5,853 crore₹5,330 crore₹3,614 crore
Net interest margin4.26%3.96%3.53%
Provision coverage ratio81%80%89%

Source: Company reports

Loans grew faster than deposits, but home loan growth slows down

Axis Bank reported a higher growth in loans when compared to that of deposits during Q3. The lender’s total loans increased 15% YoY to ₹7.62 lakh crore, while deposits grew 9.9% to ₹8.48 lakh crore.

Rising interest rates also reflected in the bank’s cost of deposits, which increased 34 basis points YoY to 3.94%. The cost of deposits has increased for the fifth consecutive quarter.

Retail loans continued to account for over half of Axis Bank’s total loans, and their share of the total loan increased YoY to 56% in Q3 from 55% a year ago. Retail loans grew 17% in this period to ₹4.29 lakh crore.

Notably, home and auto loans grew the slowest in the retail loan segment, at 9% and 11% YoY respectively, while small business banking (SBB) and credit card segments grew the fastest at 60% and 39% YoY respectively.

Outstanding home loans stood at ₹1.49 lakh crore, while auto loans stood at ₹46,834 crore. Together, these two categories account for 46% of Axis Bank’s retail loan book.

Outstanding SBB loans stood at ₹38,319 crore, while outstanding credit card amount stood at ₹20,567 crore in Q3.

Payments, digital banking and wealth management services report double-digit growth

Axis Bank’s payments, digital banking and wealth management services reported healthy growth during the December quarter, reflecting a continued momentum in these verticals.

The lender issued 1.04 million new credit cards during Q3, while its card holders’ spends increased 42% YoY during the quarter. Total outstanding amount of its credit card users grew 39% YoY to ₹20,567 crore.

In terms of digital uptake of its services, the lender reported that digital transactions accounted for 94% of its total transactions in Q3, while its mobile banking transactions increased 88% YoY in this period.

The bank’s wealth management solution, Burgundy, has ₹2.84 lakh crore worth assets under management. Burgundy Private, its offering for ultra-high net worth clients, surged to 4,417, from 3,209 families in the last one year, the bank said.


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