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Mumbai: Axis Bank's net profit increased 83% in the second quarter, driven by strong growth in personal loans and small and medium-sized enterprises (SMEs), supported by lower provisions additions to bad debts that reached their lowest level in three years.
Net profit reached Rs. 790 crore, or Rs. 3.07 per share, compared with Rs. 432 crore, or Rs. 1.80 per share, compared to a Bloomberg survey of 22 market players who predicted a profit. 759 crores. Most importantly, slippages dropped to Rs. 2,777 crore, a 69% decrease, indicating an improvement in the credit quality of the lender.
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<p> " Landslides declined significantly during the quarter. We have seen a general moderation, "said Jairam Sridharan, chief financial officer at Axis Bank." The shifts will never go away, but the fact remains that for the first time in many quarters, quarterly shifts are less than 1% of loans. We plan to keep them below 1% in the near future. "
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<p> Slower additions to the NPAs were the first since the third quarter of fiscal 2016 and came just two quarters after the lender lost its first loss in the fourth quarter of fiscal year 18. Of Lower slippages resulted in lower NPAs, with net NPCs falling 58 basis points year-on-year and settling at 2.54%.
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<p> This allowed the bank to reduce its provisions to 2,927 crores of rupees a year ago from 3,140 crores and 3,337 crores of rupees during the quarter ended June 2018. The bank thus recovered 2 100 crores of rupees during the quarter.
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<p> "We do not want to rejoice for the moment. This quarter has been positive in terms of improving badet quality, expanding margins and loan growth, which will help us seize opportunities and lay the foundation for the future. . We expect to further reduce slippage, "Sridharan said.
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<p> Advances increased by 11%, thanks to a 15% increase in the domestic pound. In turn, this was driven by growth of 20% in retail loans and 14% in loans to SMEs.
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<p> The bank is using it to reduce its overseas portfolio, which has shrunk by 12% and is moving away from long term loans that have fallen by 7%. Instead, he increased working capital loans by 21%. The growth of the loan portfolio enabled the bank to generate net interest income of Rs. 5,232 billion, up 15%.
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<p> Net interest margin (NIM reduced to 3.36% from 3.45% last year, but higher than 3.29% in the first quarter of the year.) Sridharan said the bank was NIM was expected to reach the 3.60% range, with industry peers generally operating at a range of 3 to 4% NIM.
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<p> According to badysts, the results indicate a recovery, but the bank must always keep an eye on slippages. "A new CEO will take office after three months. Let's hope we do not find new skeletons in the closet, "said Lalitabh Shrivastawa, an badyst at ShareKhan, a subsidiary of BNP Paribas.
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<p> CEO Shikha Sharma announced that his successor, Amitabh Chaudhry, would join the bank on Nov. 19, about six weeks before officially taking office as the bank's executive director, to ensure a smooth transition.
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