Axis Bank Ltd — Q3 FY24
Axis Bank reported a steady Q3 FY24 with PAT of INR 6,071 crore, up 4% QoQ, driven by robust loan growth (23% YoY gross of IBPC) and fee income (29% YoY).
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Claim Ledger
Did management answer the analysts?
Every material analyst question, graded on whether management actually answered it — with the verbatim exchange and quantitative claims checked against filed numbers.
63%Questions answered2Evaded / deflected12Questions audited
Partial answer
Medium priority
LCR deposit number and outlook on deposit growth constraints.
Asked by Chintan Joshi, Autonomous Research
Answered LCR range but did not give the requested retail deposit number, deferred to later disclosure.
did not provide specific LCR deposit numberdeferred to Basel disclosures
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Question
Before I ask, can I just quickly get your LCR deposit number for reference? And then the question I have, you know, your comment you made that deposit growth will be a constraint on growth overall. Now, how should we think about this?
Rajiv Anand, Deputy Managing Director
I think he spoke about LCR at 118, where we are on an average for the quarter. Typically, if you see over the last 18 quarters, we've bobbed between 115 and 120. That is, that is where, you know, we are, we're quite comfortable...
Answered
High priority
Bulk deposits timing and LDR outlook for FY25.
Asked by Mahrukh Adajania, Nomura
Directly addressed that bulk deposits were raised through the quarter, not bunched at end.
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Question
I just wanted to check on bulk deposits. So, the system liquidity got much tighter towards the end of the quarter. Would it be fair to assume that a lot of bulk deposits were mobilized towards the end of the quarter, and the full impact on cost will be seen on the next quarter?
Neeraj Gambhir, Executive Director
So, Mahrukh, this is Neeraj here. On your question around the bulk deposit pricing, I think, bulk deposit pricing continues to be inching up steadily through the quarter. It's not just a quarter-end phenomena.
Declined
High priority
LDR range for FY25.
Asked by Mahrukh Adajania, Nomura
Explicitly declined to give any LDR range or target.
refused to provide range
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Question
On just the LDR thing, I know that it's improved, so it's rare that in this quarter someone's LDR has improved, but any range you would like to give for FY 25?
Puneet Sharma, CFO
Mahrukh, thank you for the question. We don't offer a range on LDR. We think there are multiple variables through which we manage our balance sheet. LDR is one of the variables. We do not have a targeted LDR that, that we discuss publicly.
Partial answer
High priority
Deposit mix shift to non-retail term deposits and impact on cost.
Asked by Suresh Ganapathy, Macquarie Capital
Acknowledged the mix shift but redirected focus to retail growth; did not quantify cost impact.
reframed to highlight retail growthdid not directly address cost impact
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Question
So two questions. One is on this, deposit mobilization strategy itself, right? So, I mean, we were focusing a lot on retail deposits, but if I look at the same slide eight, it looks like almost 60%+ of incremental deposits this quarter has come from non-retail term deposits, right?
Puneet Sharma, CFO
Suresh, thank you for the question. Couple of things. I think while we look at slide eight, I will also request you to look at slide nine and slide eight collectively. On slide nine, you will see that our retail term deposits have grown by 17% on a year-on-year basis...
Answered
High priority
Capital adequacy and internal CET1 threshold.
Asked by Suresh Ganapathy, Macquarie Capital
Directly answered that they are comfortable and do not need to raise capital, with explanation.
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Question
Just finally, one question on capital. I know you have, of course, repeated your stance, but still, again, for the benefit of everybody, you're at 13.7%. You know, your peers, of course, are easily 200, 300 basis points above the number that you're reporting... At 13.7%, are you comfortable?
Puneet Sharma, CFO
Suresh, thank you for the question. I think the framework that we've consistently adopted with respect to capital is we think about capital on two pillars, capital for protection and capital for growth. Under the protection pillar, we look at regulatory capital as well as capital to protect domestic triple-A. Even at 13.71, we carry sufficient cushion over both those areas.
Partial answer
Medium priority
Loan mix shift towards unsecured and steady state mix target.
Asked by Pranav Gundlapalle, Bernstein
Answered about current mix but avoided giving a specific target or impact of risk weights.
did not directly address risk weight change impactno specific end state mix given
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Question
Just had a question on your loan mix. You've continued to move towards, you know, the higher-yielding segments. Two questions on that. One, with the risk weight change that has been announced, do you see a change in pace of that transition? Number one. And number two, do you have a end state in mind in terms of, the split between mortgages and other consumer segments, that you have right now?
Amitabh Chaudhry, Managing Director and CEO
So, the consumer business, especially the personal loan business, has been growing. But if you see slide 22, in terms of retail disbursement trend, quarter-on-quarter, that number in terms of composition is down to 22% from 25% in the previous quarter, which really means that the other assets also are growing.
Answered
High priority
Timeline for deposit and credit growth convergence at 13%.
Asked by Jai Mundhra, ICICI Securities
Directly stated that the tight liquidity will persist through FY25, implying convergence timeline.
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Question
Sir, on your opening remarks, you mentioned that the systemic deposits and credit growth are likely to converge at around 13%. Is this like FY 2024 or this is like FY 2025? So any timeline for that number?
Amitabh Chaudhry, Managing Director and CEO
I mean, if you look at all the commentary coming from RBI and the governor and the commentary around inflation, I think it is quite obvious that this is not just next three months event, this will continue into financial year 25, and I think stay during financial 25 for you know, almost the entire year, unless something dramatic happens.
Answered
Medium priority
Increase in repo-linked loans and removal of cost guidance.
Asked by Rikin Shah, IIFL Securities
Directly explained the increase is due to book growth and rejected rate cut expectations.
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Question
First one is on the linking of the loan book to different benchmarks. So we see that the repo loan benchmarking the loans linked to the repo loans are up by almost 10 percentage point in last one year to almost 48-49%. ... that is in the context of mortgage loan growth being slower. So just wanted to understand what's driving this change in the context of impending rate cut cycle that we may see?
Rajiv Anand, Deputy Managing Director
Firstly, we are not in the impending rate cut camp, so let me get that out of the way first. I think, you know, as you know, that all of retail or much of retail and almost all of SME is repo linked, and therefore, as that book grows, it continues to be repo linked.
Answered
High priority
Growth guidance vs deposit constraint and cost of funds gap.
Asked by Kunal Shah, Citigroup
Directly reaffirmed the medium-term growth guidance despite deposit constraints.
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Question
So I'm not sure if you answered that, because I missed some part of the conversation. But given that you always have been highlighting in terms of the growth targets, but now it seems to suggest that deposit is definitely a constraint. So would we still continue to grow at 4-6 percentage points higher than the system average when you are highlighting that loan and deposit growth would settle at 13 odd %?
Amitabh Chaudhry, Managing Director and CEO
Boss, you're, you're trying to hold us quarter-on-quarter. I think we continue to maintain our guidance, that in the medium term we'll continue to be able to maintain that 400-600 basis point differential. We're not changing that.
Partial answer
Medium priority
Quantum of written-off book and recovery outlook.
Asked by Saurabh Kumar, JPMorgan
Provided cumulative write-off number but did not split by segment or give recovery timeline.
did not break down corporate vs retaildid not give timeline for recovery cycle
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Question
So on this wholesale credit side, so you've had a large recovery. So two things. One, can you help us with, what is the quantum of the, on the written off book, what is the quantum left? And how long would you expect this, negative credit, cycle, I mean, the recovery cycle in the corporate to last?
Puneet Sharma, CFO
Saurabh, thank you for your question. I think if you look at slide 62 of our investor presentation, you will see a table that gives you the cumulative value of credit write-offs to date. The number as Q3 of FY 2024 is INR 40,211 crore.
Partial answer
Medium priority
Government deposit market share and pricing actions post risk weight hike.
Asked by Param Subramanian, Nomura
Acknowledged strength but did not quantify market share or gearing advantage.
declined to share market share numbersno specific gearing provided
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Question
So, historically, you know, we've, you know, we've pointed out in the past that we are strong in the government business, and one of the reasons for the tighter liquidity is government money going out of the system. So, when that money comes back, are we better placed compared to the rest of the system? Any sort of gearing you'd like to highlight over there?
Rajiv Anand, Deputy Managing Director
So you're right. You know, historically, we've had a strong relationship with the government at the central state government, district panchayats, right down to the beneficiaries. And we continue to leverage on those relationships.
Evasive
High priority
Potential second-order asset quality impact from liquidity tightness.
Asked by Sameer Desai, JM Financial
Gave a non-committal answer, acknowledged risk but no specific assessment.
no clear answerhedged with uncertainty
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Question
Just thinking around this liquidity tightness, wanted to get thoughts from Amitabh on how do you think from the second order derivative perspective of this phenomenon, would you worry on potential asset quality issues? Are we still some time away from that?
Amitabh Chaudhry, Managing Director and CEO
Well, it's difficult to predict at this stage. I think it's given where the Indian banking system is, where the consumer sentiment is, yes, and the way regulator is watching the metrics so closely and so actively, I do not see the second order impact coming through, you know, in any big or significant way.