AXIS BANK FINANCIAL – Q3 RESULTS

Last Updated on January 24, 2024 by ethinos

Q3FY24 Highlights:

1. Operating profit: ₹9,141 crores, up 6% QOQ.

2. PAT: ₹6,071 crores, up 4% QOQ.

3. Consolidated ROE: 18.61%, driven by balanced deposit and loan growth (5% and 4% respectively).

9MFY24 Overview:

1. PAT: ₹17,732 crores, up 16% YOY.

2. Consolidated ROE: 18.86%, up 82 bps YOY.

Financial Metrics:

1. Consolidated ROA: 1.84% (subsidiaries contributing 9 bps).

2. Net Interest Income: Grew 9% YOY, 2% QOQ, Net Interest Margin: 4.01%.

3. Fee income: Grew 29% YOY, 4% QOQ, Retail fee up 36% YOY, 6% QOQ, granular fees constitute 93%.

4. Core Operating revenue: Up 14% YOY, 2% QOQ.

Business Growth:

1. Total business grew 20%.

2. Advances grew 22%, MEB deposits grew 18% (YOY | QOQ basis).

3. Retail term deposits up 17% YOY, 2% QOQ, CASA grew 12% YOY (CASA ratio at 42%).

Loan Portfolio:

1. Retail loans up 27%, SME up 26%, Corporate loans up 15% (gross of IBPC sold) YOY | QOQ basis.

Capital Adequacy:

1. Overall CAR: 16.63%, CET 1 ratio: 13.71%.

2. Organic net accretion to CET-1: 39 bps in 9MFY24.

Asset Quality:

1. GNPA%: 1.58%, declined by 80 bps YOY, 15 bps QOQ.

2. NNPA%: 0.36%, declined by 11 bps YOY.

Credit Cards and Merchant Acquiring:

1. 1.26 million credit cards issued in Q3.

2. CIF market share: 14%, card spends up 79% YOY, 13% QOQ.

3. Largest player in Merchant Acquiring with a market share of 18.9%, incremental share of 26% in the last year.

Additional Read: Q3 Results Dashboard

Performance Highlights Overview:

1. Healthy Operating Performance:

• Net Interest Income grew 9% YOY, 2% QOQ; Net Interest Margin at 4.01%.
• Core Operating revenues increased by 14% YOY, 2% QOQ; operating profit rose by 6% QOQ.
• Consolidated ROE and ROA at 18.61% and 1.84%, respectively; subsidiaries contributed 54 bps and 9 bps.

2. Strong Loan Growth Across Segments:

• Advances (gross of IBPC sold) up 23% YOY, 4% QOQ.
• Rural loans grew 34% YOY, 7% QOQ; Small Business Banking loans up 40% YOY, 6% QOQ.
• Mid-Corporate (MC) book expanded by 30% YOY; SBB + SME + MC mix at ₹1,98,553 crores, up ~620 bps in the last 3 years.

3. Retail Deposits and CASA Strength:

• Retail term deposits grew 15% YOY, 3% QOQ on QAB basis.
• CASA ratio at 42%, among the industry’s best.
• Total deposits increased by 18% YOY, 4% QOQ on QAB basis.

4. Well-Capitalised and Self-Sustaining Structure:

• Overall CAR at 16.63%, CET 1 ratio at 13.71%.
• Net organic accretion to CET-1: 39 bps in 9MFY24.
• COVID provisions of ₹5,012 crores, not in CAR calculation, provide an additional cushion of ~43 bps.

5. Dominance in Payments and Digital Banking:

• Axis Mobile & Axis Pay serve ~10 mn non-Axis Bank customers.
• 100+ digital partnerships; ~18.8 mn customers on WhatsApp banking.
• Axis Mobile remains the world’s highest-rated MB app on Google Play store; ~13 mn MAU.
• Credit card CIF market share at 14%, Retail Card spends grew 88% YOY, 13% QOQ.

6. Improving Asset Quality and Credit Metrics:

• PCR healthy at 78%; Coverage ratio at 153%.
• Net slippage ratio at 0.50%, declined 43 bps YOY, 9 bps QOQ.
• Gross slippage ratio at 1.62%, down 41 bps YOY.
• Q3FY24 net credit cost at 0.28%, declined 14 bps QOQ.

7. Steady Performance of Domestic Subsidiaries:

• 9MFY24 profit of ₹1,108 crores, up 17% YOY, with a 50% return on investment in domestic subsidiaries.
• Axis Finance 9MFY24 PAT grew 25% YOY to ₹425 crores; improved asset quality, ROE at 16.4%.
• Axis AMC 9MFY24 PAT at ₹297 crores, Axis Securities 9MFY24 PAT grew 31% YOY to ₹198 crores.
• Axis Capital 9MFY24 PAT at ₹108 crores, executed 71 investment banking deals in 9MFY24.

Profit & Loss Account – Period Ended 31st December 2023

Operating and Net Profit:

1. Operating profit for Q3FY24: ₹9,141 crores, up 6% QOQ; Core Operating profit: ₹8,850 crores.

2. Net profit in Q3FY24: ₹6,071 crores, a 4% YOY growth.

Net Interest Income and Margin:

1. Net Interest Income: ₹12,532 crores, up 9% YOY, 2% QOQ.

2. Net Interest Margin for Q3FY24: 4.01%.

Other Income:

1. Fee income: ₹5,170 crores, up 29% YOY, 4% QOQ.

2. Retail fees: 36% YOY, 6% QOQ; Retail cards and payments fee: 52% YOY, 10% QOQ.

3. Non-interest income for Q3FY24: ₹5,555 crores, up 22% YOY.

Provisions and Contingencies:

1. Provisions for Q3FY24: ₹1,028 crores; specific loan loss provisions: ₹691 crores.

2. Cumulative provisions: ₹11,981 crores, standard asset coverage of 1.29%.

3. Provision coverage ratio: 153% of GNPA.

9MFY24 Financial Performance:

1. Net Interest Income: ₹36,805 crores, up 18% YOY; Fee income: ₹14,620 crores, up 29% YOY.

2. Core operating profit: ₹25,878 crores, up 12%; Operating profit: ₹26,587 crores, up 16%.

3. Total provisions: ₹2,878 crores, up 23% YOY; Net profit: ₹17,732 crores, up 16%.

Balance Sheet – As of 31st December 2023:

1. Total balance sheet: ₹13,98,541 crores, up 14% YOY.

2. Total deposits: ₹18% YOY growth, savings account deposits: 16% YOY growth.

3. Total advances: ₹9,32,286 crores, up 22% YOY.

Payments and Digital:

1. Issued 1.26 million new credit cards in Q3FY24.

2. Dominance in Retail Digital banking, with 96% digital transactions.

3. Various digital channels showing strong growth, including UPI transactions and mobile banking.

Wealth Management Business – Burgundy:

1. AUM: ₹5,05,407 crores, up 78% YOY.

2. Burgundy Private AUM: ₹1,76,965 crores, up 79% YOY.

Capital Adequacy and Shareholders’ Funds:

1. Shareholders’ funds: ₹1,42,984 crores, up 9% YOY.

2. Capital Adequacy Ratio (CAR): 16.63%, CET1 ratio: 13.71%.

3. COVID provisions: ₹5,012 crores, not considered for CAR calculation.

Asset Quality:

1. Gross NPA: 1.58%, Net NPA: 0.36% as of 31st December 2023.

2. Provision coverage ratio: 78%, as of 31st December 2023.

Network:

1. Added 100 branches in Q3FY24, total distribution network: 5,252 domestic branches.

2. 15,931 ATMs and cash recyclers as of 31st December 2023.

Key Subsidiaries’ Performance:

1. Domestic subsidiaries’ 9MFY24 PAT: ₹1,108 crores, up 17% YOY.

2. Axis Finance 9MFY24 PAT: ₹425 crores, up 25% YOY.

3. Axis AMC 9MFY24 PAT: ₹297 crores; Axis Capital 9MFY24 PAT: ₹108 crores.

4. Axis Securities 9MFY24 PAT: ₹198 crores, up 31% YOY.

Additional Check: Axis Bank Share Price

About Axis Bank

Axis Bank, the third-largest private sector bank in India, provides a comprehensive range of financial services to a diverse customer base, including Large and Mid-Corporates, MSMEs, Agriculture, and Retail Businesses. The bank boasts a substantial domestic presence with 5,100+ branches and 15,000+ ATMs & cash recyclers nationwide. Axis Bank operates 6 Axis Virtual Centres, featuring over 1,500 Virtual Relationship Managers as of March 31, 2023. Internationally, the bank has eight offices, including branches in Singapore, Dubai (at DIFC), and Gift City-IBU, along with representative offices in Dhaka, Dubai, Abu Dhabi, Sharjah, and a subsidiary in London, UK. Axis Bank, established in 1994, was among the pioneers of new-generation private sector banks. It was promoted jointly by major financial institutions, including LIC, GIC, and SUUTI. As of September 30, 2023, LIC is the sole promoter of the bank, and other initial promoters are reclassified to the public category. With a robust balance sheet size of Rs. 13,17,326 crores as of March 31, 2023, Axis Bank has demonstrated consistent growth, achieving a 5-year CAGR of 14% in Total Assets & Advances and 16% in Deposits from 2017-18 to 2022-23.

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