Axis Bank Q3 Profit Up 4%, Loan Growth Slows
By Rediff Money Desk, Mumbai Jan 16, 2025 20:52
Axis Bank's Q3 profit rose 4% to Rs 6,304 crore, driven by higher provisions and slower loan growth. Retail segment asset quality pressures impacted the results.

Photograph: Danish Siddiqui /Reuters
Mumbai, Jan 16 (PTI) Axis Bank reported a 4 per cent growth in its December quarter net profit to Rs 6,304 crore, impacted by asset quality pressures from the retail segment.
Executives at the country's third largest private sector lender said the bank sees a degree of indebtedness in certain segments of the borrowers which led to taking a deliberate call on slowing loan growth to 9 per cent in the October-December period.
The bank, however, does not have any clarity on how long the ongoing challenges will last, an executive said, adding that the tepid GDP growth is among the factors in the macro environment having a bearing on repayments.
The core net interest income grew by 9 per cent to Rs 13,483 crore and the net interest margin declined by 8 basis points on year to 3.93 per cent.
Its gross slippages came at Rs 5,432 crore, of which Rs 4,923 crore came from the retail segments including unsecured lending and agri loans.
Amitabh Chaudhry, the managing director and chief executive of the lender, said retail asset quality is among the three focus areas for the bank along with deposit quality and costs in the current cycle and exuded confidence that things will "stabilise" over the next few quarters.
The bank, which is first among the major lenders to disclose the December performance, said retail assets grew 11 per cent and home loans, the mainstay, grew by only 3 per cent.
Among the unsecured loans, personal loans and credit card segment assets grew 17 per cent and 8 per cent, respectively, and executives explained that these growth rates are calls taken after deliberation.
An executive explained that the bank has taken corrective calls in a few segments like raising the cut-off for who can qualify for a loan, raising the income cut-offs and understanding a customer's leverage better which has revealed a degree of indebtedness to the lender.
The corporate advances grew just by 3 per cent, while those to small and medium enterprises were up 15 per cent.
On the back of the elevated slippages, the gross non-performing assets ratio moved up to 1.46 per cent from 1.44 per cent three months ago. The overall provisions more than doubled to Rs 2,155 crore from Rs 1,028 crore in the year-ago period.
The bank's chief financial officer Puneet Sharma said there is no material movement in the provisions, and added that much of the increase is towards retail unsecured assets because of the current macro environment.
He said personal loans and credit card segments have been seeing higher levels of risks and the bank is monitoring both portfolios closely, and added that the overall exposure to microfinance is less than Rs 6,000 crore which is less than 0.7 per cent of the total assets.
The bank's capital adequacy ratio stood at 17.01 per cent as of December 31, 2024.
The consolidated net profit came at Rs 6,742 crore as against Rs 6,491 crore in the year-ago period.
Among the subsidiaries, Axis Finance reported a 20 per cent growth in net profit for the first nine months of the fiscal, the asset management company had its net profit jump by 27 per cent and the investment banking arm's net grew 36 per cent.
Axis Bank shares closed 1.25 per cent up at Rs 1,040.20 apiece on the BSE on Thursday, as against gains of 0.42 per cent on the benchmark.
Executives at the country's third largest private sector lender said the bank sees a degree of indebtedness in certain segments of the borrowers which led to taking a deliberate call on slowing loan growth to 9 per cent in the October-December period.
The bank, however, does not have any clarity on how long the ongoing challenges will last, an executive said, adding that the tepid GDP growth is among the factors in the macro environment having a bearing on repayments.
The core net interest income grew by 9 per cent to Rs 13,483 crore and the net interest margin declined by 8 basis points on year to 3.93 per cent.
Its gross slippages came at Rs 5,432 crore, of which Rs 4,923 crore came from the retail segments including unsecured lending and agri loans.
Amitabh Chaudhry, the managing director and chief executive of the lender, said retail asset quality is among the three focus areas for the bank along with deposit quality and costs in the current cycle and exuded confidence that things will "stabilise" over the next few quarters.
The bank, which is first among the major lenders to disclose the December performance, said retail assets grew 11 per cent and home loans, the mainstay, grew by only 3 per cent.
Among the unsecured loans, personal loans and credit card segment assets grew 17 per cent and 8 per cent, respectively, and executives explained that these growth rates are calls taken after deliberation.
An executive explained that the bank has taken corrective calls in a few segments like raising the cut-off for who can qualify for a loan, raising the income cut-offs and understanding a customer's leverage better which has revealed a degree of indebtedness to the lender.
The corporate advances grew just by 3 per cent, while those to small and medium enterprises were up 15 per cent.
On the back of the elevated slippages, the gross non-performing assets ratio moved up to 1.46 per cent from 1.44 per cent three months ago. The overall provisions more than doubled to Rs 2,155 crore from Rs 1,028 crore in the year-ago period.
The bank's chief financial officer Puneet Sharma said there is no material movement in the provisions, and added that much of the increase is towards retail unsecured assets because of the current macro environment.
He said personal loans and credit card segments have been seeing higher levels of risks and the bank is monitoring both portfolios closely, and added that the overall exposure to microfinance is less than Rs 6,000 crore which is less than 0.7 per cent of the total assets.
The bank's capital adequacy ratio stood at 17.01 per cent as of December 31, 2024.
The consolidated net profit came at Rs 6,742 crore as against Rs 6,491 crore in the year-ago period.
Among the subsidiaries, Axis Finance reported a 20 per cent growth in net profit for the first nine months of the fiscal, the asset management company had its net profit jump by 27 per cent and the investment banking arm's net grew 36 per cent.
Axis Bank shares closed 1.25 per cent up at Rs 1,040.20 apiece on the BSE on Thursday, as against gains of 0.42 per cent on the benchmark.
Source: PTI
DISCLAIMER - This article is from a syndicated feed. The original source is responsible for accuracy, views & content ownership. Views expressed may not reflect those of rediff.com India Limited.
You May Like To Read
TODAY'S MOST TRADED COMPANIES
- Company Name
- Price
- Volume
- Vodafone Idea L
- 9.47 (+ 2.05)
- 61048233
- Thinkink Picturez
- 0.45 ( 0.00)
- 22664084
- G G Engineering
- 1.22 ( -3.94)
- 18109205
- Srestha Finvest
- 0.69 ( -1.43)
- 12131937
- Hathway Cable & Data
- 14.75 ( -2.12)
- 11583833
MORE NEWS

Samsung India Employees Strike Over Union...
Employees at Samsung's Sriperumbudur plant in Tamil Nadu are on strike, demanding...
HC Robotics to Invest Rs 500 Cr in Telangana,...
Centillion Networks'' subsidiary HC Robotics will invest Rs 500 crore in Telangana,...

Ajax Engineering Raises Rs 379 Cr Ahead of IPO
Ajax Engineering, backed by Kedaara Capital, has secured Rs 379 crore from anchor...