Results at a Glance
The Board of Directors of Axis Bank Limited approved the financial results for the quarter and nine months ended 31st December 2015 at its meeting held in Mumbai on Wednesday, 20th January 2016. The results have been subjected ta Limited Review by the Bank’s Statutory Auditors.
Profit & Loss Account: Period ended 31st December 2015
• Core Operating Profit and Net Profit
Earnings quality remained strong with the Bank showing a healthy financial performance in terms of growth in core revenues for the quarter and nine months ended 31st December 2015. The Bank’s Core Operating Profit for Q3FY16 grew by a robust 20% YOY t`3,571 crores, and for 9MFY16 grew by 24% YOY t`10,477 crores. The Net Profit for Q3FY16 and 9MFY16 grew by 15% YOY and 17% YOY t`2,175 crores and `6,069 crores respectively.
• Net Interest Income and Net Interest Margin
The Bank’s Net Interest Income (NII) grew by 16% YOY t`4,162 crores during Q3FY16 from `3,590 crores in Q3FY15. Net interest margin for Q3FY16 remained healthy and stood at 3.79%. NII for 9MFY16 als rose
18% YOY t`12,280 crores from `10,425 crores during 9MFY15.
• Other Income
Other income (comprising fee, trading profit and miscellaneous income) for Q3FY16 grew 15% YOY and stood at `2,338 crores as against `2,039 crores during the same period last year. During 9MFY16, other income grew 18% YOY and stood at `6,677 crores. During the quarter, fee income grew 12% YOY treach `1,885 crores. The key driver tthe growth in fee income was Retail Banking, which grew by 14% YOY and constituted 40% of the Bank’s total fee income. Transaction Banking fees grew 9% YOY and constituted 20% of the total fee income. Treasury & DCM fee performance was robust and grew 15% YOY tconstitute 10% of the total fee income of the Bank. During 9MFY16, fee income grew 13% YOY primarily driven by 17% YOY growth in retail fee and 37% YOY growth in Treasury & DCM.
Balance Sheet: As on 31st December 2015
The Bank’s Balance Sheet grew 18% YOY and stood at `4,96,391 crores as on 31st December 2015. The Bank’s Advances grew 21% YOY t`3,15,367 crores as on 31st December 2015. Retail Advances grew 27% YOY and stood at `1,25,796 crores and accounted for 40% of the Net Advances of the Bank. If we were tinclude SME loans that qualify as regulatory retail, the share of retail loans ttotal loans would be 45%. Corporate credit grew 21% YOY and stood at `1,48,385 crores; and accounted for 47% of Net Advances. SME Advances grew 7% YOY and stood at `41,186 crores.
The book value of the Bank’s investments portfoli as on 31st December 2015, was `1,15,445 crores, of which `83,711 crores were in government securities, while `23,997 crores were invested in corporate bonds and `7,737 crores in other securities such as equities, preference shares, mutual funds, etc.
CASA Deposits as on 31st December 2015 constituted 43% of total deposits. Savings Account balances grew at a strong 16% YOY, up sharply from the 12% YOY growth we had last quarter. CASA, on a daily average basis, recorded a growth of 14%, in which Savings Bank Deposits recorded a growth of 13% YOY, while Current Account deposits grew by 15%. The proportion of CASA on a daily average basis remained at the same level as the previous quarter and constituted 40% of total deposits.
CASA and Retail Term Deposits constituted 79% of Total Deposits as on 31st December 2015 compared to 78% as on 31st December 2014.
Capital Adequacy and Shareholders’ Funds
The shareholders’ funds of the Bank grew 17% YOY and stood at `51,047 crores as on 31st December 2015. The Bank is well capitalised. Under Basel III, the Capital Adequacy Rati(CAR) and Tier I CAR as on 31st December 2015 (including the net profit for 9MFY16) was 15.47% and 12.35% respectively.
Asset Quality
As a prudent measure, the Bank has fully recognized the necessary impairment and the resultant provisioning impact of the asset reclassification as per RBI’s assessment in the current quarter itself. Consequently, as on 31st December 2015, the Bank’s GNPA and Net NPA levels were 1.68% and 0.75% respectively, as against 1.38% and 0.48% respectively as on 30th September 2015.
As on 31st December 2015, the Bank’s provision coverage, as a proportion of Gross NPAs including prudential write-offs, was 72%. The provision coverage before accumulated write-offs was 82%.
As on 31st December 2015, the Bank’s Gross NPA was `5,724 crores against `4,451 crores as on 30th September 2015. During the quarter, the Bank added `2,082 crores tGross NPAs, and Recoveries and upgrades were `156 crores. There were nsales tARCs during the quarter. The cumulative value of net restructured advances as on 31st December 2015 stood at `7,745 crores, constituting 2.31% of net customer assets, compared t`8,426 crores, constituting 2.65% of net customer assets as on 30th September 2015.
Network
During Q3FY16, the Bank added 62 branches tits network across the country, pushing up the tally t216 new branches in 9MFY16. As on 31st December 2015, the Bank had a network of 2,805 domestic branches and extension counters situated in 1,796 centres compared t2,558 domestic branches and extension counters situated in 1,708 centres last year. As on 31st December 2015, the Bank had 12,631
ATMs spread across the country.
International Business
The Bank has nine international offices with branches at Singapore, Hong Kong, Dubai (at the DIFC), Colomband Shanghai; representative offices at Dubai, Abu Dhabi, Dhaka and an overseas subsidiary at London, UK. The international offices focus on corporate lending, trade finance, syndication and investment banking and liability businesses.
The total assets under overseas branches were USD 8.06 billion as on 31st December 2015.
Appointment of Additional Independent Director
Ms. Ketaki Bhagwati has joined the Board of Directors as an Additional Independent Director with effect from 19th January 2016. Ms. Bhagwati is a former Chief Investment Officer in the Financial Institutions Group at the International Finance Corporation (IFC). She has over twenty four years of experience in private equity, M&A, debt & structured finance and distressed asset workouts. Ms. Bhagwati has a Bachelors of Arts from Wellesley College (USA) and a Master of Public Administration from Harvard University's John F. Kennedy School of Government.
She is currently a member of the Wellesley College Business Leadership Council and Golden Seeds, an early stage investment firm with a focus on women leaders.
Appointment of Additional Non-Executive Director
Mr. B. Babu Rahas joined the Board of Directors as an Additional Non-Executive Director (Nominee of SUUTI) with effect from 19th January 2016. Mr. Ra has more than 26 years of experience in the area of Finance, Capital Markets and Fund Management in UTI Mutual Fund. Mr. B. Babu Ra is an MBA from Indian Institute of Management, Ahmedabad.
Mr. Rais currently managing the activities of the Specified Undertaking of UTI (SUUTI) on deputation from UTI Asset Management Company Ltd.
Re-disseminated by The Asian Banker