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Axis Bank reported a mixed Q1 FY25. PAT grew 4% YoY to INR 6,035 crore, but net credit cost rose to 0.97% annualized, impacted by timing differences in recoveries. Core operating profit grew 16% YoY, with NIM stable at 4.05%. The Citi integration completed ahead of schedule, with customer metrics exceeding targets. Management highlighted deposit growth as a key constraint, guiding advances to grow 300-400 bps faster than industry over medium term. Credit costs are expected to normalize as recoveries materialize. Risk: elevated slippages in retail unsecured portfolios could persist if economic conditions weaken.
एक्सिस बैंक ने पहली तिमाही (अप्रैल-जून 2024) में मिला-जुला प्रदर्शन दिया। - शुद्ध लाभ (PAT) पिछले साल से 4% बढ़कर ₹6,035 करोड़ हुआ। - लेकिन बैंक को कर्ज वसूली में देरी के कारण बुरे कर्ज (NPA) का खर्च बढ़ा, जो सालाना आधार पर 0.97% हो गया। - मुख्य कारोबार से मुनाफा 16% बढ़ा, और ब्याज आय-व्यय का अंतर (NIM) 4.05% पर स्थिर रहा। - सिटी बैंक का विलय समय से पहले पूरा हुआ, और ग्राहक लक्ष्य से बेहतर रहे। - प्रबंधन ने कहा कि जमा बढ़ाना चुनौती है, इसलिए कर्ज वृद्धि उद्योग से 3-4% अधिक रखने का लक्ष्य है। - बुरे कर्ज का खर्च सामान्य होने की उम्मीद है। - जोखिम: अगर अर्थव्यवस्था कमजोर हुई, तो छोटे व्यक्तिगत कर्ज (असुरक्षित) पर डिफॉल्ट बढ़ सकता है।
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Retail unsecured credit cost increase
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CASA Ratio
40%
Flat QoQ
Quarterly average balance CASA ratio remained stable sequentially.
Gross Slippage Ratio (annualized)
1.97%
+10bps YoY
Increase driven by small-value wholesale accounts; retail slippages declined YoY.
Fee Income Growth
16%
+16% YoY
Net fee income grew 16% YoY to INR 5,204 crore, with retail fees up 18%.
CET1 Ratio
14.06%
+32bps QoQ
Capital ratio improved, with net accretion of 32 bps in the quarter.
What Changed vs Last Quarter
NEW
Advances growth 300-400 bps above industry
Management expects advances to grow 300-400 basis points faster than industry over the medium to long term, contingent on deposit availability.
NEW
Credit cost not indicative of full year
Q1 annualized net credit cost of 0.97% is not reflective of full-year expectations due to timing differences in recoveries.
NEW
Operating expense growth moderation
Expense growth will moderate through FY25 from the 27-29% YoY range seen last year.
DROPPED
Medium-term loan growth 300-400bps above industry
Management expects to grow advances 300-400 basis points faster than the industry over the medium to long term (3-5 years).
DROPPED
System credit growth to converge to deposit growth of ~13%
Management expects system credit growth to converge towards deposit growth of around 13% for the fiscal year.
DROPPED
Backbook repricing to finish in Q2 FY25
CFO stated that if marginal cost of funds remains current, backbook repricing should be completed in Q2 of FY25.
DROPPED
No need for equity capital for growth or protection
Management reiterated that the bank does not need equity capital for either growth or protection pillars; capital raise resolution is purely enabling.
NEW RISK
Retail unsecured credit cost increase
Credit costs in retail unsecured portfolios are rising, though still within internal risk benchmarks. Further deterioration could pressure earnings.
NEW RISK
Lower recoveries in wholesale book
55% of the increase in net credit cost was due to lower recoveries and upgrades in the wholesale segment, which are episodic and may not materialize as expected.
NEW RISK
Linked account slippages distorting asset quality
32% of gross slippages were from linked accounts, which may inflate reported stress; resolution timing is uncertain.
RISK GONE
Geopolitical tensions impacting inflation and rates
Management noted geopolitical tensions pose risk to food and commodity prices, keeping policy rates higher for longer.
RISK GONE
Regulatory scrutiny on tech and KYC
Analyst raised concerns about RBI actions on tech deficiencies; management declined to disclose specific communications but emphasized investments in resilience.
RISK GONE
Unsecured retail asset quality
Analyst questioned asset quality in cards and unsecured loans; management said they remain within guardrails but are closely monitoring early risk indicators.
🤫 Topics management stopped discussing
Mentioned in Q2 FY24, Q3 FY24
Tight liquidity and rising deposit costs could limit the bank's ability to grow loans at the desired pace, potentially compressing NIMs.
Mentioned in Q2 FY24, Q3 FY24
Axis Bank maintains its medium-term guidance of growing loans 4-6 percentage points faster than the industry, though not on a quarter-to-quarter basis.
Mentioned in Q3 FY24, Q4 FY24
Management expects system credit growth to converge towards deposit growth of around 13% for the fiscal year.
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Guidance and risk preview
Management expects advances to grow 300-400 basis points faster than industry over the medium to long term, contingent on deposit availability.
Credit costs in retail unsecured portfolios are rising, though still within internal risk benchmarks.
View Risks →