Private lender, Axis Bank has been focused on three core areas of the execution of their strategy, namely becoming a resilient all-weather franchise, creating multi-brigadier forces to build competitive advantage, and building for the future,” stated Amitabh Chaudhary, MD & CEO, Axis Bank.
Chaudhary emphasised that the bank is focused on firing up bank acquisition engines for the retail, savings account franchise.
He highlighted the success of their Neo segment, saying “Neo continues to drive higher transaction banking flows, leading to better account balances. Our NEFT market share in terms of value has increased to 13%.”
Reflecting on the bank’s focus on high-yield segments, Axis Bank MD & CEO said, “Our better yielding focus segments, including retail, SMEs, and mid corporate segments, together grew by 24% YoY, now constituting 42% of the total advances YoY, up by 1000 bps in the last four years.”
Axis Bank has made significant investments in information technology, architecture modernisation, cybersecurity, and fraud control, he said during a press conference on Wednesday.
Speaking on growing home loan portfolio, the bank aims to grow in a calibrated manner on the return of capital being the guiding principle.
Axis Bank’s future-ready platforms were also a focal point: “We have created future-ready and scalable platforms to replace fragmented legacy systems, demonstrated through the successful launch of Neo for corporates and integrated treasury management.”
On customer safety and fraud prevention, Chaudhary said, “We now have a strong dedicated financial crime intelligence division, combining analytics, digital monitoring, and fraud control capabilities to safeguard the bank.”
Speaking on the Mule accounts also warned by RBI, Subrat Mohanty, Executive Director – Banking Operations and Transformation, Axis Bank commented, “Within the bank, we have multiple ways of tackling it at the onboarding stage itself and at the transaction monitoring stage, identifying the suspicious accounts and then weeding them out.”
Mohanty added, “About 6 months back, we created a new unit which consolidated some of these roles across the banks into single unit, which is Financial Crime Intelligence Unit, which is working on 20 initiatives as we speak largely focused on preventing frauds, and identifying suspicious and mule accounts.”
He also shared insights on the bank’s strategic acquisition: “We have completed the final migration of Citi Bank customers on July 14th, two months ahead of schedule.”
Chaudhary outlined the bank’s vision for future growth: “Our journey to the future is led by our focus on Digital Bharat Banking. Digital banking performance continues to remain strong with a 55% increase in deposits.”
Regarding rural banking growth, he noted, “Rural advances grew 24% YoY, and deposits in Bharat branches are up by 9%.”
Key Highlights: Axis Bank Q1 FY25 Results
Net Profit and Income:
Axis Bank reported a net profit of Rs 6,035 crores for Q1 FY25, reflecting a 4% year-on-year (YoY) increase. The Bank’s Net Interest Income (NII) grew by 12% YoY and 3% quarter-on-quarter (QoQ) to Rs 13,448 crores. The Net Interest Margin (NIM) for Q1 FY25 stood at 4.05%.
Fee and Non-Interest Income:
Fee income for Q1 FY25 grew by 16% YoY to Rs 5,204 crores, driven by an 18% increase in retail fees, which constituted 71% of the total fee income.
Provisions and Contingencies:
The bank’s provisions and contingencies for Q1 FY25 stood at Rs 2,039 crores, with specific loan loss provisions at Rs 2,551 crores. The provision coverage ratio (PCR) including all provisions is at 150% of Gross Non-Performing Assets (GNPA).
Asset Quality:
The asset quality deteriorated sequentially with Gross NPA level up by 11 basis points to 1.54% and Net NPA up by 3 basis points to 0.34%, as of June 30, 2024, compared to 1.43% and 0.31% as of March 31, 2024.
Balance Sheet and Deposits:
The bank’s balance sheet grew by 13% YoY to Rs 14,68,163 crores as of June 30, 2024. Total deposits increased by 13% YoY, with current account deposits growing by 12% YoY and total term deposits by 20% YoY. The share of CASA (current and savings account) deposits in total deposits was 42%.
