Private sector lender Axis Bank on Thursday announced a 54% increase in net profit year-on-year (YoY) to Rs 4,117.8 crore for the fourth quarter ended March 31, 2022.
In the corresponding quarter of last year, the company recorded a net profit of Rs 2,677.1 crore. CNBC-TV18 Polls had predicted a profit of Rs 3,879.8 crore for the quarter under review.
The bank’s operating profit for the quarter rose 13% year-on-year and 5% quarter-on-quarter to Rs 6,466 crore. The bank’s net interest income (NII) increased by 17% year-on-year and 2% quarter-on-quarter to Rs 8,819 crore. Net Interest Margin (NIM) for Q4FY22 was 3.49%.
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Under Basel III, the capital adequacy ratio (CAR) and the CET1 ratio as of March 31, 2022 were 18.54% and 15.24% respectively. Additionally, the bank held Rs 5,012 crore of COVID provisions, not taken into account for the CAR calculation, providing a cushion of 60 basis points against the reported CAR. Book value per share increased from Rs 332 as of March 31, 2021 to Rs 375 as of March 31, 2022.
Fee revenue for Q4FY22 increased 11% YoY and 12% QoQ to Rs 3,758 crore. Retail expenses increased 14% YoY and 14% YoY; and constituted 66% of the bank’s total fee income. Retail asset fees (excluding cards) were up 41% YoY and 16% QoQ.
Business and corporate banking fees together rose 7% year-on-year and 10% quarter-on-quarter. Trading profit and miscellaneous income for the quarter amounted to Rs 231 crore and Rs 234 crore respectively. Overall, non-interest income (comprising fees, trading profit and miscellaneous income) for Q4FY22 was Rs 4,223 crore, up 19% YoY and 10% YoY. quarter.
As of March 31, 2022, the gross NPA and net NPA levels reported by the bank were 2.82% and 0.73% respectively, compared to 3.17% and 0.91% as of December 31, 2021. during the quarter were Rs 3,981 crore, compared to Rs 4,147 crore in Q3FY22 and Rs 5,285 crore in Q4FY21 (by IRAC standards).
NPA recoveries and upgrades during the quarter were Rs 3,763 crore. Hence, net NPA slippages (before write-offs) for the quarter of Rs 218 crore compared to Rs 860 crore in Q3FY22 and Rs 1,822 crore in Q4FY21. Net slippages in retail were Rs 193 crore, commercial banking was Rs 85 crore and wholesale banking was negative Rs 60 crore.
In addition to the recoveries and upgrades mentioned earlier, the recoveries from the delisted accounts were Rs 719 crore. Therefore, overall, slippages were less than recoveries, upgrades, and recoveries from written-off accounts. Bank of the quarter canceled NPAs totaling Rs 1,696 crore.
As of March 31, 2022, the bank’s provision coverage, as a proportion of gross NPA, was 75%, compared to 72% as of March 31, 2021 and 72% as of December 31, 2021.
The outstanding amount of standard restructured loans based on funds implemented as part of the resolution of the stress related to COVID-19 (Covid 1.0 and Covid 2.0) decreased during the quarter and, as of March 31, 2022, amounted to to Rs 4,029 crore or 0.52% of gross client assets. The bank carries a provision of 24% on restructured loans, which exceeds regulatory limits.
Specific provisions for loan losses for Q4FY22 were Rs 602 crore compared to Rs 790 crore in Q3FY22. The bank did not use the Covid provisions during the quarter. The Bank holds accumulated provisions (standard + additional other than NPA) of Rs 12,428 crore at the end of Q4FY22.
“It is relevant to note that this is in addition to the NPA provisioning included in our PCR calculations. These cumulative provisions result in a standard asset coverage of 1.77% as of March 31, 2022. On an aggregated basis, our coverage ratio provisions (including specific + standard + additional + Covid provisions) amounts to 132% of the GNPA as of March 31, 2022,” the bank said in a regulatory filing.
Cost of credit for the three months ended March 31, 2022 was 0.32%, down 116 basis points year-on-year and 12 basis points quarter-on-quarter.
The Board of Directors has recommended a dividend of 1 st per capital share on the par value of Rs 2 per capital share for the year ended 31 March 2022. The results fell after the close of market hours. Shares of Axis Bank ended at Rs 779.95, up Rs 18.35, or 1.81% on BSE.
First post: STI