Friday, October 17, 2014

AXIS BANK - SECOND QUARTER RESULTS (SEP-2014) - NPT UP18% YoY - GOOD PERFORMANCE





AXIS BANK



SECOND QUARTER RESULTS
(SEP-2014)

Highlights of Q2FY15

Retail Franchise continues to show traction

• Savings Bank Deposits registered strong growth, rose 20% YOY to `79,875 crores as on September 30, 2014, and 19% YOY to `71,074 crores on Daily Average Basis
• Retail Term Deposits grew 43% YOY, constituted 62% of Term Deposits
• CASA and Retail Term Deposits constituted 79% of Total Deposits
• Domestic Retail Advances grew 27% YOY and accounted for 38% of Net Advances

Stable Earnings Profile

• Core Operating Revenue grew 17% YOY, stood at `5,171 crores
• Core Operating Profit rose to `2,861 crores, registered growth of 16% YOY
• Return on Assets stood at 1.69% and Return on Equity at 16.38%

Well positioned for future growth with Tier I CAR & of 12.57% & Total CAR & of 15.90% under Basel III



 Net Cumulative restructured advances were `6,690 crores (2.52% of net customer assets) as on September 2014

 `570 crores of loans were restructured during the quarter

Net Profit and Operating Revenue 

Ø  The Bank showed healthy earnings in terms of growth in core revenues for the quarter and half-year ended 30th September 2014.
Ø  The Bank’s Core Operating Revenue for Q2FY15 grew by 17% YOY to `5,171 crores and for H1FY15 grew by 15% YOY to `9,913 crores.
Ø  The Net Profit for both Q2FY15 and H1FY15 grew 18% YOY to `1,611 crores and `3,277 crores respectively.
Ø  Net Interest Income and Net Interest Margin
Ø  The Bank’s Net Interest Income (NII) rose 20% YOY to `3,525 crores during Q2 FY15 from `2,937 crores during Q2 FY14.
Ø  NII for H1 FY15 rose 18% YOY to `6,835 crores from `5,802 crores in H1FY14.
Ø  Net interest margin , excluding one offs, remained stable and stood at 3.93% in H1  FY15.

Results at a Glance


Ø  Net Profit for Q2 FY15 and H1FY15 grows 18% YOY to `1,611 crores and `3,277 crores respectively
Ø  The Bank’s Retail franchise continues to show robust growth 

·        Savings Bank Deposits grew 20% YOY and Retail Term Deposits grew 43%

·        CASA and Retail Term Deposits constitutes 79% of Total Deposits

·        Daily Average CASA for Q2 FY15 constitutes 40% of Total Deposits

·        Domestic Retail Advances grew 27% YOY and accounts for 38% of Net Advances

Ø  Asset Quality is healthy with Net NPAs at 0.44%

Ø  Bank is well capitalised with a healthy Capital Adequacy Ratio (CAR). Under Basel III, Total CAR & Tier I CAR (including the net profit for H1FY15) stood at 15.90% & 12.57% respectively.

Ø  Other income (comprising fee, trading profit and miscellaneous income) for Q2 FY15 grew 10% YOY and stood at `1,948 crores as against `1,766 crores during the same period last year. During H1FY15, other income stood at `3,639 crores.

Ø  During the quarter, fee income grew 11% YOY to reach `1,591 crores. The key contributor to the fee income of the Bank was Retail Banking , which grew by 24%.

Ø  During the quarter, trading profit of the Bank was `271 crores , while miscellaneous income stood at `86 crores.

Ø  The Bank’s Balance Sheet grew 12% YOY and stood at `3,94,972 crores as on 30th September 2014. The Bank’s Advances grew 20%YOY to`2,42,198 crores as on 30th September 2014.

Ø  Retail Advances stood at `94,321 crores as on 30th September 2014 against `71,035 crores as on 30th September 2013.

Ø  Domestic Retail Advances (excluding Loans against FCNR deposits) grew by 27% YOY and stood at `90,277 crores and accounted for 38% of the net advances of the Bank. 

Ø  SME advances grew by 15% YOY and stood at `37,701 crores and accounted for 16% of the net advances.

Ø  The book value of the Bank’s investments portfolio as on 30th September 2014 , was `1,14,284 crores, of which `71,530 crores were government securities, while `23,564 crores were invested in corporate bonds and `19,190 crores in other securities such as equities, preference shares, mutual fund s etc.

Ø  Savings Bank Deposits recorded a healthy growth of 20% YOY to reach `79,875 crores as on 30th September 2014, while Current Account deposits grew 8% YOY and stood at `46,492crores.

Ø  CASA deposits , on a daily average basis, during H1 FY15 grew 16%YOY constituting 40% of total deposits , compared to 39% during the same period last year.

Ø  Retail Term Deposits grew 43% YOY to comprise 62% of the Term Deposits of the Bank.

Ø  CASA and Retail Term Deposits constituted 79% of Total Deposits as on 30th September 2014 compared to 69% last year.

Ø  The shareholders’ funds of the Bank grew 15% YOY and stood at `41,764 crores as on 30th September 2014.

Ø  The Bank is well capitalised and the Capital Adequacy Ratio (CAR) as on 30th September 2014 under Basel III was 14.84% (excluding the net profit for H1 FY15) and Tier-I CAR was 11.51% (excluding the net profit for H1FY15). If the net profit of `3,277 crores for H1FY15 is included, the total CAR and Tier-I CAR as on 30th September 2014 under Basel III would be 15.90% and 12.57% respectively.

Ø  Asset Quality As on 30 th September 2014 :- Gross NPAs and Net NPAs stood at 1.34 % and 0.44% respectively.

Ø  The Bank held provision coverage of 78% as on 30 th September 2014,as a proportion of Gross NPAs,including prudential write-offs. The provision coverage before accumulated write-offs was 87%.

Ø  As on 30th September2014, the Bank’s Gross NPA was`3,613crores as against`3,463crores as on 30th June2014. During the quarter, the Bank added `911crores to Gross NPAs. Recoveries and upgrades were`164crores and write-offswere`597crores. The cumulative value of net restructured advances as on 30th September 2014 stood at `6,690 crores, constituting 2.52%  of net customer assets.

Ø  Network  :- During Q2FY15, the Bank added 84 branches to its network across the country and at the end of 30th September2014, it had a network of 2,505 domestic branches and extension counters and 13,146 ATMs situated in 1,686centres, compared to 2,225 domestic branches and extension counters and 11,796 ATMs situated in 1,502 centres last year.


OTHER NEWS : Axis bank cuts base lending rate by 10 basis points to 10.15 per cent as liquidity improved and bond yields softened. The cut was a token 10 basis points to 10.15 per cent. 

"The bank has reduced the base rate by 10 bps, as the cost of fund has eased due to softening of  interest rates based on improving liquidity and other macroeconomic developments," Sidharth Rath, president (treasury, business banking & capital markets), Axis Bank said in a press statement on Thursday.

 RBI has kept its key policy rate unchanged since January this year. Earlier, it was raising the rate frequently to control Inflation. 

Since Inflation is coming down now and Government is seriously taking supply side measures towards reduction of Inflation, there seems to be possibility of a rate cut by RBI. If that happens, loan demand for expansion purposes will increase at all Banks, especially private Banks, leading to a healthy growth in the Loan Portfolios of Banks.


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