Axis Bank Q4 RESULTS 2022: Profit jumps 54% YoY

Axis Bank, the third largest private sector bank in the country, has recorded a substantial year-on-year increase in its earnings for Q422. According to the Axis Bank results for the final quarter of FY 21-22, the total income of the bank stood at Rs. 21,999.5 crores, which is a 15.57% rise over the corresponding income for Q421 which was Rs. 19,035 crores.

The net profit for Q422 was Rs. 4,117.8 crores, representing a 54% year-on-year increase from the net profits for the final quarter of the preceding fiscal (Rs. 2,677 crores). The net interest income (NII) of the lender rose by 16.7% in Q422, amounting to Rs. 8,819 crores as compared to a NII of Rs. 7,556.98 in Q421.

Axis Bank Q4 Earnings Register Drastic Year-on-year Rise

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The Loan Book Strengthens

During the reporting quarter, the loan book of the private lender strengthened. With a 15% year-on-year rise in total advances, the advances in Q422 stood at Rs. 7.07 lakh crores. A drastic proportion of Axis Bank’s net advances (57%) comprised retail loans, and the segment recorded a year-on-year growth of 21%. One of the interesting takeaways from the Axis Bank Q4 results was that the bank’s corporate loans recorded a mere 4% growth over the corresponding numbers for Q421.

Provisions and Contingencies Decline

As per the Axis Bank Q4 earnings news, the bank’s provisions and contingencies for the quarter stood at Rs. 987.2 crores, reflecting a 54.4% decline. The sequential line in ten aforementioned metric was recorded at 26%. Despite the sharp decline in provisions for the final quarter of the past fiscal, the bank has ample cumulative provisions. The non-utilization of its Covid-19 provisions has helped the lender accumulate cumulative provisions to the tune of Rs. 12,428 crores as of Q422. 

Another key facet of the Axis Bank Q4 results is the significant decline in the lender’s credit cost. In Q422, the credit cost for Axis Bank was 0.32% – a decline of 116 basis points from Q421 and 12 basis points from Q322. Furthermore, the provision coverage ratio as a proportion of Axis Bank’s Gross Non-performing Assets increased to 75% in Q422. The corresponding ratio for the preceding quarter was 72%.

The Asset Quality Improves 

Axis Bank’s results news for Q422 also revealed an improvement in the asset quality of the lender. The bank’s Gross Non-performing Assets as a percentage of its net advances reduced to 2.82% in Q422. This decline represents a 35 basis points fall in the aforementioned ratio. The Net Non-performing Assets Ratio for the lender also registered a decline in Q422 and fell to 0.73% – a decrease of 18 basis points. 

With a quarter-on-quarter reduction in gross slippages for the lender, the net slippages on NPAs reduced to Rs. 218 crores. Considering the fact that the net slippages on NPAs stood at Rs. 860 crores in Q322, the bank has clearly made substantial headway in recoveries. The recovery on written-off accounts was Rs. 719 crores. 

The Non-Interest Income Rises

According to the Axis Bank results for Q422, the Non-Interest Income of the bank rose by 19.3% year-on-year. As of Q422, the Non-Interest Income stood at Rs. 4,223 crores. The largest contributor to the lender’s other income was fee income, which registered a year-on-year increase of 11%.

The Earnings per Share Rises by 150%

Driven by Axis Bank’s robust financials for Q422, the bank’s Earnings per Share rose to Rs. 14.40. This represents a 150% rise over the EPS for Q421 which was Rs. 9.60. With a rise in the EPS, Axis Bank Limited’s share price and market standing are slated to become stronger.

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