Axis Bank, India’s leading private sector bank, released its quarterly results for the year 2023-24 on July 11, 2023. The bank reported strong financial performance, with net profit growing by 62% year-on-year (YoY) to ₹5,853 crore in Q3FY23.
Axis Bank Quarterly Results Q1 (April-June 2023):
- Net profit: ₹4,125.26 crore, up 91% YoY
- Net interest income (NII): ₹6,320.89 crore, up 27% YoY
- Fee income: ₹3,289.53 crore, up 22% YoY
- Gross non-performing assets (NPAs) ratio: 2.6%
- Net NPAs ratio: 0.4%
- Capital adequacy ratio (CAR): 18.90%
Quarter 2 (July-September 2023):
- Net profit: ₹5,853.06 crore, up 62% YoY
- Net interest income (NII): ₹9,342.13 crore, up 32% YoY
- Fee income: ₹4,675.86 crore, up 23% YoY
- Gross non-performing assets (NPAs) ratio: 2.5%
- Net NPAs ratio: 0.3%
- Capital adequacy ratio (CAR): 19.81%
According to the Bank CEO’ Amitabh Chaudhry, their financial performance was excellent because they earned more money from interest and fees. He also said that the quality of the bank’s assets stayed good, and the percentage of bad loans decreased to 2.5%.
In our opinion it sounds good for maintaining the strong momentum in financial performance in the coming quarters. So we can expect NII to grow in the range of 20-25% YoY in FY24, while fee income is expected to grow by 15-20% YoY.
Major Factors For Bank Strong Performance:
- In Q3FY23, the bank’s interest earnings increased by 32% compared to the previous year, reaching ₹9,342 crore. Why this happened, because of various reasons, like higher interest rates, more loans being taken, and lower costs for funds.
- In Q3FY23, the bank’s fee income rose by 23% compared to the previous year, reaching ₹4,676 crore. This increase is because the bank earned more fees from both individual customers and businesses.
- The bank’s assets remained in a stable and secure condition, with only 2.5% of loans being classified as bad (NPAs). The bank is able to achieve this by carefully managing and maintaining the quality of its assets.
- The bank’s capital adequacy ratio (CAR) was at 19.81%, which is much higher than the required regulatory minimum of 15%. So it’s clear that bank has enough money set aside to handle unexpected financial challenges confidently.
Summary (Expectations):
Axis Bank showcased robust financial performance in the first half of FY23. Notably, the bank’s net profit skyrocketed by 71% YoY, while its NII and fee income experienced substantial growth, rising by 29% YoY and 21% YoY, respectively. Additionally, the bank’s asset quality remained stable, and the gross NPAs ratio declined to a commendable 2.5%. The bank’s CAR also demonstrated strength, standing at an impressive 19.81%.
Looking ahead, the bank’s investors look confident for maintaining strong momentum throughout the second half of FY23. Expecting continued growth, we foresee the NII to expand in the range of 20-25% YoY in FY24, with fee income expected to grow by 15-20% YoY.