Axis Bank Q3 Insights: Lender Expected to Report Up to 200% PAT Rise, Double-Digit Loan Growth

NEW DELHI: Private lender Axis Bank is expected to report a strong set of December quarter figures, supported by impressive growth in deposits and advances.

Analysts expect a 150-200% jump in net profit during the period, compared to the same quarter last year. Net interest income (NII) growth is expected to be double digit. However, compared to the previous quarter, these numbers are expected to decline.

“Slippages are expected to decrease significantly on a sequential basis due to underlying factors as well as due to the absence of point measures (Srei). Considering all factors, including a slight reduction in excess liquidity, net interest margin is expected to increase significantly on a sequential basis,” YES Securities analysts said.

According to them, Axis Bank’s commission income is expected to increase in a reasonably healthy manner due to improved business activity and payment transactions during the festival season.

“Spending would increase sequentially based primarily on increased business activity. Provisions would increase sequentially as high recoveries in 2QFY22 had led to significant reversals,” they added.

During the September quarter, Axis Bank had reported an 86% year-on-year (YoY) increase in net profit to Rs 3,133 crore. This is the highest quarterly profit ever made by the bank. The bank’s net interest income (NII) had increased by 8 percent.

ICICIdirect estimates that the lender will post an anticipated growth of 10.4% YoY to Rs 6.4 lakh crore while deposits are expected to grow 14% YoY to Rs 7.4 lakh crore, with CASA expected to hold steady at 44.5%. It expects net interest income to rise 11.3% year-on-year to Rs 8,207 crore, while net interest margin is expected to reach 3.75%, a marginal improvement.

“The improving pace of business activity is expected to keep operations stable, while a sequential decline in the cost of credit could lead to profits of Rs 3,176 crore. The GNPA, NNPA ratio is expected to remain stable at 3.5% and 1.1%, respectively,” ICICIdirect said.

Sharekhan analysts predict 12% year-on-year growth, driven by the retail portfolio. But he sees stable margins on a yearly basis. The controllable key would be skids and the BB pound and lower, he said.

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