Axis Bank Q3 profit rises 31% to Rs 656 crore

MUMBAI: A rise in other income and lower expenses have helped Axis Bank report a 31% rise in net profit for the third quarter ended December
31,2009. The net profit for the bank was at Rs 655.98 crore as against Rs 500.86 crore in the previous year. ( Watch )

The results were higher than average analysts expectation of Rs 616 crore. Meanwhile, the bank in its board meeting on Friday appointed Adarsh Kishore as additional director and non-executive chairman. He was the finance secretary from 2004 to 2006. The bank also appointed VR Kaundinya, MD, Advanta and SB Mathur, former chairman of LIC and the National Stock Exchange of India as additional independent directors.

Advances saw a growth of 13% for the year at Rs 84,770 crore which was equivalent to the industry growth. However, this was much lower than HDFC Bank which also reported profits on Friday. The advances for the third quarter were at Rs 3,726 crore.

According to Axis Bank CFO and executive director Somnath Sengupta: “We expect a 15% growth for the whole year. We should be growing at a higher rate in the fourth quarter. Some of the sanctions which were made earlier could be drawn down in the quarter. We see growth across several segments. In retail it would be from mortgages and auto, SME and agriculture and also from large and mid corporates.” The other income of the bank saw a growth of 34.95% to Rs 988.09 crore. The trading profit rose by 49% to Rs 170 crore while fee income rose 29% to Rs. 800 crore. The fee income from large and mid corporate grew 69%, followed by retail (38%), treasury (33% ), SME and agri lending businesses (18% ) and business banking (13% y-o-y).

The bank scrip closed at Rs 1078.2 up by 1.52% on BSE. Provisions have seen a sharp rise of 182.7% to Rs 373.14 crore. The bank has also reported a marginal rise in gross NPAs to 1.23% from 0.90%. Mr Sengupta points that the bank is trying to provide prudently where it can. The provision coverage ratio has improved to 69% from 63% earlier.

The net interest margin of the bank has seen a sharp growth to 4% from 3.52%. This was also because of a rise in demand deposits and reduction in the cost of term deposits. The percentage of demand deposits or current and savings account of the bank is now at 46% as against 38%.