Axis Bank’s share price fell over 5 percent to 52-week Low intraday on Friday, January 17, because its Q3FY25 earnings were not up to market expectations.
Private sector lender bank said on the earnings front; the company posted a ₹ 6,304 crore net profit, a 3.83 percent YoY rise from ₹6,071 crores in the same period last year for the December quarter. Net profit, however, fell 9 percent in the quarter ended December 31, down from ₹6,917.57 crore in the preceding quarter of July September.
Key Financial Highlights
Net Interest Income (NII): The bank’s NII was up 9 percent YoY at ₹13,606 crores, although the net interest margin (NIM) slipped to 3.93 percent from 4.01 percent a year ago and 3.99 percent in the previous quarter.
On a YoY basis, while the total interest income was ₹30,954 crore, up by 11 percent, the interest expenses reached ₹17,348 crore, up by 12 percent.
The average gross non-performing asset (NPA) ratio was 1.46 percent, up from 1.44 in the previous quarter. The net NPA ratio also rose slightly, rising to 0.35 percent from 0.34 percent on a sequential basis.
Loan and Deposit Growth: Loans were up 9% year-on-year, to 10.14 trillion INR, with retail loans increasing 11%. Similarly, deposits rose by 9 percent YoY to ₹ 11.48 trillion. Still, growth rates did not succeed in rising to the industry averages.
Challenges And Slippages
The fresh slippages again surfaced in the December quarter at ₹5,432 crore, higher by 46 percent YoY and 22 percent sequentially. Out of this, ₹4,923 crore formed the retail loans; ₹215 crore from SMEs; ₹294 crore from the wholesale business.
This also raised specific credit costs to 86 bps from 58 bps in the prior quarter due to the steep increase in slippages