Axis Bank’s Financial Performance in Q1:
Axis Bank’s standalone net profit for the quarter ended June dropped by 4% year-on-year to Rs 5,806.14 crore due to a rise in provisions and bad loans. The provisions and contingencies surged sharply by 94% year-on-year to Rs 3,947.66 crore.
The lower-than-expected net profit was Rs 6,375.77 crore according to analysts, compared to Rs 7,117.5 crore in the previous quarter. The credit cost for the quarter was at 1.38%.
Asset Quality and Performance:
During the quarter, Axis Bank’s gross non-performing ratio rose to 1.57% from 1.28% in the previous quarter. Net NPA also increased to 0.45% from 0.33%. The bank attributed these changes to the technical parameters affecting reported asset quality.
Axis Bank reported gross slippages of Rs 8,200 crore during the quarter, with a significant portion coming from the retail side.
Net Interest Income and Margin:
Despite a muted growth in net interest income, which rose by 1% to Rs 13,559.75 crore, the bank’s net interest margin stood at 3.8%. The net advances and deposit portfolio also saw growth during the quarter.
Overall, Axis Bank’s Q1 results reflect a challenging quarter with pressures on profitability and asset quality.
Future Outlook:
As Axis Bank continues to navigate through economic challenges and industry shifts, the focus remains on managing provisions, improving asset quality, and sustaining growth in key business segments.
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