Axis Bank July-September Profit falls 26% on Higher Provisions, Weak Trading Income

Axis Bank Ltd. reported its steepest profit drop in 19 quarters as provisions surged amid deteriorating asset quality and weaker trading income.

Net profit fell over 26% on year to ₹50.90 billion in the September quarter and was down more than 12% sequentially. Provisions rose 61% on year to ₹35.47 billion, while fresh slippages increased to ₹56.96 billion from ₹44.43 billion a year ago.

The bank’s gross non-performing assets ratio inched up to 1.46% as of Sept. 30, while the net NPA ratio was steady at 0.44%.

Operating expenses rose nearly 5% on year to ₹99.57 billion, with higher other operating costs offsetting a small decline in employee expenses. Other income fell 1% on year and nearly 9% on quarter to ₹66.25 billion due to lower trading gains, which more than halved on year to ₹4.98 billion.

Total income rose 1% on year to ₹375.95 billion, supported by an 8% rise in income from investments. Net interest income increased 2% on year to ₹137.45 billion, while net interest margin narrowed to 3.73% from 3.80% a quarter earlier.
Advances rose 12% on year to ₹11.17 trillion, led by 20% growth in corporate loans and 19% in SME loans. Deposits were up 11% to ₹12.03 trillion, though the CASA ratio fell to 40% from 41% a year ago.
Axis Bank’s capital adequacy ratio stood at 16.55% as of September 30, while its provision coverage ratio was 70%. The board also approved an amended deposit agreement related to voting rights for holders of Global Depositary Receipts.