Axis Bank Q1FY19: 6 key highlights of this quarter

One of the largest private lenders, Axis Bank has posted a good June 2018 quarter, as the bank posted a net profit of Rs 701 crores compared to a loss of Rs 2,188.74 crore in the preceding quarter. However, on yearly basis, the net profit was a decline compared to Rs 1,305.60 crore in the corresponding period of previous year. Meanwhile, Net Interest Income for Q1FY19 was Rs 5,167 crores which grew by 12% YOY and 9% QOQ. With this, Axis Bank has surpassed analysts estimate. A Bloomberg poll of experts have predicted net profit of Rs 624 crore this quarter.

Net Interest Margin for this quarter was at 3.46%, along with core operating profit of Rs 4,269 crore which was up by 23% yoy. 

Here’s are the key highlights of the performance during Q1FY19. 

Advances

Firstly, the Bank’s Balance Sheet grew 14% YOY and stood at Rs 6,92,686 crores as on 30th June 2018. 

The bank’s advances grew 14% YOY to Rs 4,41,074 crores as on 30th June 2018. Retail Advances grew 21% YOY to Rs 2,11,648 crores and accounted for 48% of the Net Advances of the Bank. SME Advances grew 19% YOY to Rs 56,983 crores. Corporate credit grew 6% YOY to Rs 1,72,443 crores and accounted for 39% of Net Advances led by 32% growth in working capital loans.

Investments

Axis Bank’s  book value or investments portfolio as on 30th June 2018, was Rs 1,54,614 crores, of which Rs 1,10,936 crores were in government securities, while Rs 28,911 crores were invested in corporate bonds and Rs 14,767 crores in other securities such as equities, preference shares, mutual funds, etc. 

CASA

CASA, on a cumulative daily average basis, recorded a growth of 15% YOY, in which Savings Bank Deposits and Current Account Deposits grew by 18% YOY and 8% YOY, respectively. The proportion of CASA on a cumulative daily average basis constituted 46% of total deposits.

CASA Deposits on a period end basis grew 8% YOY and constituted 47% of total deposits as at the end of 30th June 2018. Savings Account Deposits on period end basis grew 16% YOY while the Current Account Deposits de-grew by 5% YOY. The share of CASA and Retail Term Deposits in the Total Deposits stood at 81% as on 30th June 2018. Total Deposits grew 14% YOY. 

Capital Adequacy and Shareholders’ Funds

The shareholders’ funds of the Bank grew 12% YOY and stood at `64,186 crores as on 30th June 2018. The Bank is well capitalised. 

Under Basel III, the Capital Adequacy Ratio (CAR) and Tier I CAR (including net profit for Q1FY19) as on 30th June 2018 was 16.71% and 13.22% respectively. The Bank remains well capitalised to pursue growth opportunities. 

Asset quality

As on 30th June 2018, the Bank’s Gross NPA and Net NPA levels were 6.52% and 3.09% respectively, as against 6.77% and 3.40% respectively as on 31st March 2018. 

Axis Bank recognised slippages of `4,337 crores during Q1FY19. Corporate lending slippages stood at `2,218 crores. 88% of this came from disclosed BB & below accounts. The Bank’s BB and below rated book stood at Rs 10,396 crores. This is 2.1% of the Bank’s Gross Customer Assets, and is down to less than 1/3rd of the 7.3% peak reached in Jun-16. 

In value terms, the Gross NPA stood at Rs 32,662 crores and Net NPA stood at Rs 14,902 crores. Recoveries and upgrades were Rs 2,917 crores while write-offs during the quarter were Rs 3,007 crores. Net slippages (before write-offs) in Retail and SME stood at Rs 537 crores and Rs 355 crores respectively. 

The Bank’s provision coverage, as a proportion of Gross NPAs including prudential write-offs, stood at 69%. 

Digital Transactions

Mobile banking transaction volumes surged by 203% YOY while the mobile spends in Q1 reported a growth of 90% YOY primarily led by surge in UPI (Unified Payment Interface) transactions. Axis Bank currently has 14.60 mn Virtual Payment Address (VPAs) created across apps. During the quarter, Axis Bank processed over 79 million UPI transactions with total transaction value of Rs 9,706 crores.

During the quarter, credit card usage witnessed significant growth of 51% YOY in value terms. The share of digital transactions in the overall transaction mix for the Bank remained strong and stood at 70% as at end of June 2018. 

The Bank’s online instant Savings Accounts offering ‘ASAP’ has witnessed strong response from customers with 0.64 mn ASAP accounts opened in little over six months with 0.39 mn accounts opened during Q1FY19.

Today, on stock exchanges, the share price of Axis Bank ended at Rs 568.45 per piece above Rs 14.80 or 2.67% on BSE.