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View Promises →Axis Bank Ltd — Q2 FY25
Axis Bank reported a steady Q2 FY25 with PAT of INR 6,918 crore, up 18% YoY, driven by healthy operating income growth and moderation in operating expenses.
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Axis Bank reported a steady Q2 FY25 with PAT of INR 6,918 crore, up 18% YoY, driven by healthy operating income growth and moderation in operating expenses. Consolidated ROA improved to 1.92% and ROE to 18.08%. NIM stood at 3.99%, flat sequentially excluding one-offs. Deposit growth of 14% YoY outpaced the industry by 200 bps, while loan growth lagged at 11% YoY due to calibrated approach in unsecured retail segments. Retail slippages rose, primarily from unsecured products, but management expects corrective actions to contain stress. Fee income grew 11% YoY. Guidance: medium-term loan growth 300-400 bps above industry, deposit growth remains a key focus. Risk: elevated retail slippages could persist if unsecured stress broadens.
एक्सिस बैंक ने सितंबर 2024 तिमाही में 6,918 करोड़ रुपये का शुद्ध लाभ कमाया, जो पिछले साल से 18% ज्यादा है। यह बैंक की कमाई बढ़ने और खर्च कम होने से हुआ। बैंक की कमाई पर रिटर्न (ROA) 1.92% और निवेश पर रिटर्न (ROE) 18.08% रहा। ब्याज से कमाई का अंतर (NIM) 3.99% पर स्थिर रहा। जमा 14% बढ़ी, जो उद्योग से 2% ज्यादा है, लेकिन कर्ज सिर्फ 11% बढ़ा क्योंकि बैंक ने छोटे कर्ज में सावधानी बरती। छोटे कर्ज में कुछ खराब कर्ज बढ़े, लेकिन बैंक इसे नियंत्रित करने की कोशिश कर रहा है। फीस से कमाई 11% बढ़ी। आगे, बैंक कर्ज को उद्योग से 3-4% ज्यादा बढ़ाना चाहता है और जमा पर ध्यान देगा। खतरा: अगर छोटे कर्ज में खराबी बढ़ी तो परेशानी हो सकती है।
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Elevated retail slippages from unsecured portfolio
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Read Transcript →Quarter Snapshot
Consolidated ROA
1.92%
+9 bps YoY
Return on assets improved year-on-year, reflecting better profitability.
Consolidated ROE
18.08%
+140 bps QoQ
Return on equity improved sharply quarter-on-quarter.
CASA Ratio
40%
flat QoQ
Quarterly average CASA ratio remained stable sequentially.
Gross NPA Ratio
1.44%
-29 bps YoY
Gross NPA ratio improved year-on-year, indicating better asset quality.
What Changed vs Last Quarter
NEW
Deposit growth to remain a key constraint in short term
Given regulatory focus on CD ratio, deposit growth will be a key constraint for advances growth in the short to medium term.
NEW
Cost growth moderation to continue
Management expects pace of cost growth to moderate, having delivered 9% YoY growth in Q2.
UPDATED
Medium-term loan growth 300-400 bps above industry
Management reiterated that advances can grow 300 to 400 basis points faster than industry in the medium to long term.
DROPPED
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.
DROPPED
Operating expense growth moderation
Expense growth will moderate through FY25 from the 27-29% YoY range seen last year.
NEW RISK
Elevated retail slippages from unsecured portfolio
Retail slippages increased 40-45 bps YoY, primarily from unsecured products, and may persist in near term.
NEW RISK
Impact of RBI draft circular on subsidiaries
RBI draft circular on overlapping businesses may affect subsidiaries; management is evaluating implications.
NEW RISK
LCR pressure from new draft norms
New LCR draft norms could reduce reported LCR from 115% closer to 100%, requiring balance sheet adjustments.
RISK GONE
Retail unsecured credit cost increase
Credit costs in retail unsecured portfolios are rising, though still within internal risk benchmarks. Further deterioration could pressure earnings.
RISK GONE
Deposit growth constraint on advances
Management flagged deposit growth as a key constraint for loan growth in the near term, which could limit balance sheet expansion.
RISK GONE
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.
RISK GONE
Linked account slippages distorting asset quality
32% of gross slippages were from linked accounts, which may inflate reported stress; resolution timing is uncertain.
🤫 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 Q3 FY24, Q4 FY24
Management expects system credit growth to converge towards deposit growth of around 13% for the fiscal year.
Fast read
Guidance and risk preview
Management reiterated that advances can grow 300 to 400 basis points faster than industry in the medium to long term.
Retail slippages increased 40-45 bps YoY, primarily from unsecured products, and may persist in near term.
View Risks →