Axis Bank Q4: profit comes in at Rs 2,677 crore

Private sector lender Axis Bank on Tuesday reported a net profit of Rs 2,677 crore for the quarter ended March as against a net loss of Rs 1,387.8 crore in the year-ago quarter.

Bank’s Net Interest Income (NII) grew 11% YOY to Rs 7,555 crores in Q4FY21 from Rs 6,808 crores in Q4FY20. Net interest margin (NIM) for Q4FY21 was 3.56%, as against 3.55% for Q4FY20.

For the March quarter, Axis Bank’s Gross NPA and Net NPA stood at 3.70% and 1.05% respectively as against 4.55% and 1.19% as on 31st December 2020. This reflects a decline of 116 bps and 51 bps respectively on a YoY basis and a decrease of 85 bps and 14 bps on GNPA and NNPA respectively on a sequential basis.

Specific loan loss provisions for Q4FY21 were Rs 7,038 crores (including reclassification of NPA provision of Rs 4,266 crores on account of Supreme Court judgment shown as other provision in prior quarter), compared to Rs 4,204 crores in Q4FY20.

During the quarter, the Bank has made additional provision aggregating Rs 803 crores on account change in NPA provision rates on loans to Commercial Banking segment. Net of the above 2 adjustments, specific loan loss provision for Q4 FY21 would have been Rs 1,969 crores

Non-interest income (comprising of fee, trading profit and miscellaneous income) for Q4FY21 grew 17% YOY to Rs 4,668 crores, from Rs 3,985 crores in Q4FY20.

Meanwhile, the board authorized the bank to raise funds in Indian or foreign currency by issue of debt instruments including but not limited long term bonds, non-convertible debentures, perpetual debt instruments, AT 1 Bonds,  Infrastructure Bonds and Tier II Capital Bonds up to Rs 35,000 crore.

It further said, the shareholders’ funds of the bank grew 20% on annual basis and stood at Rs 1,01,603 crore as on March 31, 2021.

Under Basel III, the Capital Adequacy Ratio (CAR) and CET1 ratio as on March 31, 2021 including FY’21 profits were 19.12% and 15.40% respectively.

Additionally, the bank held Rs 5,012 crores of COVID-19 provisions, not considered for CAR calculation providing cushion of 69 basis points over the reported CAR. The book value per equity share increased from Rs 301 as of March 31, 2020 to Rs 332 as of March 31, 2021.

The board of the bank at its meeting held on Tuesday considered it prudent to not propose any dividend for the year ended March 31, 2021, in light of the situation developing around Covid-19 in the country and related uncertainty that it creates.

Axis Bank completed the stake acquisition in Max Life Insurance Company Limited (Max Life) earlier this month and now together with its subsidiaries, Axis Capital and Axis Securities, owns 12.99% stake in the company and is a co-promoter of the company.

FY21 performance:
Net interest income for FY21 grew 16 % YOY to Rs 29,239 crores from Rs 25,206 crores in FY20. The operating expenses grew by 6% YoY and the cost to assets ratio stood at 1.96%.

Operating profit grew by 10% YoY to Rs 25,702 crores from Rs 23,438 crores in FY20. Total provisions for FY21 stood at Rs 16,896 crores, down 9% over the same period last fiscal. Net profit for FY21 grew 305% to Rs 6,588 crores from Rs 1,627 crores in FY20.