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Geopolitical tensions impacting inflation and rates
View Risks →Axis Bank Ltd — Q4 FY24
Axis Bank delivered a strong Q4 FY24 with consolidated PAT of INR 24,861 crore, up 160% YoY, driven by robust NII growth of 16% YoY and fee income growth of 28% YoY.
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Axis Bank delivered a strong Q4 FY24 with consolidated PAT of INR 24,861 crore, up 160% YoY, driven by robust NII growth of 16% YoY and fee income growth of 28% YoY. Net interest margin improved to 4.06% sequentially, aided by disciplined execution and mix shift. Asset quality improved with GNPA at 1.43% (down 59bps YoY) and net slippages declining 17% QoQ. Management highlighted continued focus on deposit franchise quality, with LCR accretive deposits growing 18% YoY. Guidance includes medium-term loan growth 300-400bps above industry, but near-term deposit growth is a constraint. Risk: Geopolitical tensions could impact food and commodity prices, keeping policy rates higher for longer.
एक्सिस बैंक ने चौथी तिमाही में शानदार प्रदर्शन किया। बैंक का कुल मुनाफा 24,861 करोड़ रुपये रहा, जो पिछले साल से 160% ज्यादा है। ब्याज से होने वाली आय 16% और फीस से होने वाली आय 28% बढ़ी। ब्याज दर और लागत के बीच का अंतर (NIM) 4.06% हो गया, जो अच्छा है। बैंक के खराब कर्ज (GNPA) घटकर 1.43% रह गए, जो पिछले साल से 59% कम है। बैंक जमा बढ़ाने पर ध्यान दे रहा है। आने वाले समय में कर्ज देने की रफ्तार बाजार से 3-4% ज्यादा रहेगी, लेकिन जमा बढ़ाना चुनौती है। भू-राजनीतिक तनाव से महंगाई बढ़ सकती है, जिससे ब्याज दरें ऊंची रह सकती हैं।
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CASA Ratio (QAB)
40.74%
+85bps QoQ
CASA ratio improved sequentially, reflecting better deposit mix and quality.
Gross Slippage Ratio (annualized)
1.48%
-28bps YoY
Improved asset quality with lower slippages across segments.
Retail Advances Growth
20%
+20% YoY
Retail loan book grew 20% YoY, driven by secured and unsecured products.
Fee Income Growth
28%
+28% YoY
Fee income grew 28% YoY, with retail fees up 33% YoY and third-party fees up 59% YoY.
What Changed vs Last Quarter
NEW
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.
NEW
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.
UPDATED
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).
UPDATED
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
Citi data migration and system integration by H1 FY25
The bank expects to complete data migration and system integration of the acquired Citibank business by end of first half of FY25.
DROPPED
No equity capital raise planned
Management reiterated that the bank does not intend to raise equity capital, citing organic CET1 accretion of 39bps in 9M FY24.
NEW RISK
Geopolitical tensions impacting inflation and rates
Management noted geopolitical tensions pose risk to food and commodity prices, keeping policy rates higher for longer.
NEW RISK
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.
NEW RISK
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.
RISK GONE
Bulk deposit reliance may increase funding costs
Analyst noted that 60% of incremental deposits came from non-retail term deposits, which are more fickle and could distort cost of funds.
RISK GONE
Credit costs expected to normalize upward
Management acknowledged that recoveries from written-off accounts will reduce and credit costs will move up from current low levels.
RISK GONE
Potential second-order asset quality impact from tight liquidity
Prolonged tight liquidity could lead to asset quality stress, though management sees no signs yet and is monitoring closely.
🤫 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.
Fast read
Guidance and risk preview
Management expects to grow advances 300-400 basis points faster than the industry over the medium to long term (3-5 years).
Management noted geopolitical tensions pose risk to food and commodity prices, keeping policy rates higher for longer.
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