Axis Bank Q1 FY25 Results: Net Profit Rises 4%, Asset Quality Drops

Axis Bank announced Q1FY25 results, reporting a net profit of Rs. 6,035 crore, up from Rs. 5,797 crore in Q1FY24, exceeding market expectations. Sequentially, profit fell 15% from Rs. 7,130 crore in Q4FY24. NII rose to Rs. 13,448 crore from Rs. 11,959 crore, with NIM at 4.05%, down from 4.10%. Operating profit grew 15% YoY to Rs. 10,106 crore, core operating profit rose 16% YoY to Rs. 9,637 crore.

Asset Quality of Axis Bank

The bank’s asset quality dropped sequentially, with gross non-performing assets (GNPA) increasing by 11 basis points (bps) to 1.54% and net non-performing assets (NNPA) rising by 3 bps to 0.34%. Year-on-year, GNPA and NNPA improved by 42 bps and 7 bps, respectively. CFO Puneet Sharma attributed this decline to seasonal pressures in the retail agriculture business.

Deposits & Advances

Total deposits grew 13% YoY, with current account deposits increasing by 12% and term deposits by 20%. The CASA deposits accounted for 42% of total deposits. The bank’s advances grew 14% YoY and 2% QoQ to Rs. 9.80 lakh crore, with retail loans rising 18% YoY to Rs. 5.85 lakh crore, making up 60% of the bank’s net advances.

Other Income & Fee Income for Axis Bank

Axis Bank saw a 16% YoY increase in fee income, reaching Rs. 5,204 crore. Retail fees, constituting 71% of the total fee income, grew 18% YoY. Fees from third-party products saw a 68% YoY increase. Additionally, the bank recorded a 61% growth in UPI transactions.

Asset Management & Provisions 

Gross slippages for the quarter were Rs. 4,793 crore, compared to Rs. 3,471 crore in Q4FY24. Recoveries and upgrades from NPAs totaled Rs.1,503 crore, while Rs. 2,206 crore worth of NPAs were written off. Provisions and contingencies stood at Rs.2,039 crore, with specific loan loss provisions at Rs.2,551 crore. The bank’s provision coverage ratio, including specific, standard, and additional provisions, was 150% of GNPA as of June 30, 2024.

Conclusion: Despite the drop in sequential profit and asset quality, Axis Bank’s growth in deposits, advances, and fee income, coupled with a successful integration with Citi, showcases its resilient performance in Q1FY25.

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