• Q1 net profit increases by 40.5% at Axis Bank.
• The bank reported a significant increase in net interest income.
• In the third quarter, provisions and contingencies nearly tripled.

Axis Bank reported a solid first-quarter performance on Wednesday, with a rise in net profit of 40.5%.

For the three months that ended on June 30, the Mumbai-based private lender posted a net profit of Rs 5,797 crore, demonstrating strong loan growth and an increase in net interest revenue.

The bank’s net interest income (NII) increased significantly during the quarter, rising by a whopping 27% from Rs 9,384 crore in Q1FY23 to Rs 11,958 crore. In addition, provisions and contingencies for the bank increased significantly, nearly doubling to Rs 1,035 crore.

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The bank’s net interest margins also improved, climbing to 4.1% from 3.60% a year earlier, even if they marginally decreased from 4.22% in the January-March quarter before that.

Costs associated with its $1.41 billion Citi purchase contributed to the one-time loss of Rs 5,728 crore that Axis Bank reported during that quarter.

Larger rivals of Axis Bank, HDFC Bank and ICICI Bank, also recorded net interest income increase in the double digits for the first quarter of the fiscal year.

Axis Bank’s quarterly advances increased by 22% year over year, which was in line with the current trend of double-digit loan growth among Indian banks. Deposits at the bank increased by a robust 17% as well.

Regarding asset quality, the bank’s gross bad loans as a share of total loans decreased to 1.96 percent from 2.02 percent in the previous quarter, demonstrating a good trend. The ratio of net non-performing assets, however, significantly increased to 0.41 percent from 0.39 percent in the previous quarter.

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