Profit After Tax at `5,797 crores up 41% YOY, consolidated ROE (annualized) at 19.44%, up 388 bps, driven by healthy business momentum and strong all round operating performance
- oConsolidated ROA at 1.83%, up 35 bps YOY with 3 bps contributed by subsidiaries
- o Net Interest Income grew 27% YOY and 2% QOQ, Net Interest Margin at 4.10%, up 50 bps YOY o Fee income grew 28% YOY, Retail fee grew 37% YOY, granular fees at 94% of total fees
- oOperating revenues grew 38% YOY, Operating profit grew 50% YOY
- o On a QAB1 CASA ratio stood at 44%, up 151 bps YOY and 31 bps QOQ, SA up 20% YOY &10% QOQ, CA up 17% YOY o Domestic advances up 26% YOY &2% QOQ, Retail up 21% YOY &2% QOQ, SME up 24% YOY, Corporate up 25% YOY o Overall CAR stood at 17.74% with CET 1 ratio of 14.38%, net accretion to CET-1 of 36 bps in Q1FY24 o GNPA% at 1.96% declined by 80 bps YOY, NNPA% at 0.41% declined by 23 bps YOY
- o1.11 million credit cards issued in Q1, CIF market share2 of 14% as of Jun’23, spending up 78% YOY &28% QOQ o 2nd largest player in Merchant Acquiring with market share of 18.4%, incremental share of 28% in last one year2
- The Board of Directors of Axis Bank Limited approved the financial results for the quarter 30th June 2023 at its meeting held in Mumbai on Wednesday, 26th July 2023.
This quarter, Axis Bank continued to build on its credo of creating customer delight through smart banking solutions. It was the first private sector bank to launch ‘One-View’ on its Mobile Application, leveraging the Account Aggregator ecosystem. The feature simplifies the process of managing finances for its customers, providing them access to multiple bank accounts on a single platform, eliminating the need for multiple mobile banking applications.
The Bank also partnered with the RBI Innovation Hub. Leveraging India’s digital public infrastructure, it has launched digital KCC and MSME loans, which are fully digital and enable customers to apply for and avail loans in under 5 minutes.
Advancing its digital agenda with the merchant community, the Bank introduced Sarathi – a digital onboarding platform enabling instant POS installations. This would significantly streamline and simplify the merchant acquisition process. It also partnered with Visa to launch ‘Digital Dukaan’, a comprehensive digital offering for merchants that empowers them to accept payments through various digital modes and also manage their day-to-day business digitally. The Bank has also enabled RuPay Credit Card support on UPI for its customers.
Amitabh Chaudhry, MD&CEO, Axis Bank said, “We are striving to create a distinctive new age bank that provides seamless banking solutions to customers, giving wings to their financial dreams and aspirations. We have been constantly raising the bar – strengthening our digital capabilities and building on our robust pipeline of products and services, while keeping customer centricity at the core of every initiative. With India’s strong macro environment supporting growth and providing abundant opportunities, we are geared up and confident of delivering sustainable growth across all our priority businesses.”
1 Quarterly Average Basis; 2 Based on RBI reported data as of Jun’23
Performance at a Glance
- Strong operating performance
- oNet Interest Income grew 27% YOY and 2% QOQ, Non-interest income grew 74% YOY and 6% QOQ o Operating revenues grew 38% YOY and 3% QOQ, Operating profit grew 50% YOY
- consolidated ROE | ROA at 19.44% | 1.83%, up 388 bps and 35 YOY respectively
- subsidiaries contributed 27 bps | 3 bps to consolidated ROE | ROA respectively
Robust loan growth delivered across all business segments
- Rural loans grew 22% YOY &1% QOQ, Small Business Banking loans grew 46% YOY &8% QOQ o Mid-Corporate (MC) book grew 38% YOY
- SBB + SME + MC mix at ₹1,72,589 crores| 20% of loans, up over 600 bps in last 3 years • Steady growth in granular deposits, early visibility of improving quality
- On a QAB basis total deposits grew 15% | 6% and term deposits grew 12% | 5% on YOY | QOQ basis. o On MEB1, deposits grew 17% YOY; SA grew 22% YOY, CA grew 23% YOY with CASA ratio at 46% up 182 bps YOY o Average LCR2 during Q1FY24 was ~123%, outflow rates improved ~ 460 bps over last 2 years • Well capitalized with self-sustaining capital structure; adequate liquidity buffers
- Overall capital adequacy ratio (CAR) including profit stood at 17.74% with CET 1 ratio of 14.38% oSelf-sustaining capital structure with net accretion to CET-1 of 36 bps in Q1FY24
- COVID provisions of `5,012 crores, not in CAR calculation provides additional cushion of ~50 bps • Retaining strong position in Payments and Digital Banking
- Axis Mobile & Axis Pay have ~8.4mn non-Axis Bank customers
- 100+ digital partnerships across platforms and ecosystems; ~13 mncustomers on WhatsApp banking o Axis Mobile remains the world’s3 highest rated MB app on Google Play store with rating of 4.8; ~12 mnMAU4o Credit card CIF market share at 14%, Retail Card spends grew 100% YOY and 33% QOQ •Declining gross NPA’s and slippages
- Gross NPA at 1.96% declined by 80 bps YOY & 6 bps QoQ, Net NPA at 0.41% declined 23 bps YOY o PCR healthy at 80%; On an aggregated basis5, Coverage ratio at 145%
- Q1FY24 gross slippage ratio (annualized) at 1.87%, declined 18 bps YOY, net slippage ratio at 0.80% oQ1FY24 net credit cost (annualized) at 0.50%
Bank’s subsidiaries6 continue to deliver steady performance
- Q1FY24 profit at `303 crores up 16% YoY, with a return on investment in domestic subsidiaries of 45% oAxis Finance Q1FY24 PAT grew 29% YOY to `123 crores; asset quality remains stable, CAR healthy at 18.6% oAxis AMC Q1FY24 PAT stood at `91 crores, Axis Securities Q1FY24 PAT grew 14% YOY to `45 croreso Axis Capital executed 14 investment banking deals in Q1FY24
- 1 MEB – Month End Balance, 2Liquidity Coverage Ratio 3across 64 global banks, 82 fintechs and 9 neo banks with 2 mn+ reviews
- 4 Monthly active users, engaging in financial and non-financial transactions,
- 5(specific+ standard+ additional + COVID) 6 Figures of subsidiaries are as per Indian GAAP, as used for consolidated financial statements of the Group
Profit & Loss Account: Period ended 30th June 2023
Operating Profit and Net Profit
The Bank’s operating profit for the quarter grew 50% YOY to `8,814 crores. Core Operating profit for Q1FY24 grew 27% YOY to `8,295 crores. Net profit at `5,797 crores in Q1FY24 grew by 41% YOY.
Net Interest Income and Net Interest Margin
The Bank’s Net Interest Income (NII) grew 27% YOY and 2% QOQ to `11,959 crores. Net interest margin (NIM) for Q1FY24 stood at 4.10%, up 50 bps YOY.
Fee income for Q1FY24 grew 28% YOY to `4,488 crores. Retail fees grew 37% YOY and 1% QOQ; and constituted 70% of the Bank’s total fee income. Retail cards and payments fee grew 53% YOY and 17% QOQ. Retail Assets (excluding cards and payments) fee grew 22% YOY. The Corporate & Commercial banking fees together grew 12% YOY to `1,342 crores. The trading gains for the quarter stood at `519 crores; miscellaneous income in Q1FY24 stood at `80 crores. Overall, non-interest income (comprising of fee, trading profit and miscellaneous income) for Q1FY24 grew 74% YOY and 6% QOQ to `5,087 crores.
Provisions and contingencies
Provision and contingencies for Q1FY24 stood at `1,035 crores. Specific loan loss provisions for Q1FY24 stood at `1,146 crores. The Bank has not utilized Covid provisions during the quarter. The Bank holds cumulative provisions (standard + additional other than NPA) of `11,848 crores at the end of Q1FY24. It is pertinent to note that this is over and above the NPA provisioning included in our PCR calculations. These cumulative provisions translate to a standard asset coverage of 1.39% as of 30th June, 2023. On an aggregated basis, our provision coverage ratio (including specific + standard + additional + Covid provisions) stands at 145% of GNPA as of 30th June, 2023. Credit cost for the quarter ended 30th June 2023 stood at 0.50%.
Balance Sheet: As of 30th June 2023
The Bank’s balance sheet grew 13% YOY and stood at `13,02,839crores as on 30th June 2023. The total deposits grew 17% YOY on the period-end basis, within which savings account deposits grew 22% YOY, current account deposits grew 23% YOY, and total term deposits grew 13% YOY and 2% QOQ. The share of CASA deposits in total deposits stood at 46%, up 182 bps YOY. On a QAB basis, total deposits grew 15% YOY and 6% QOQ, within which savings account deposits grew 20% YOY and 10% QOQ, current account deposits grew 17% YOY; and total term deposits grew 12% YOY and 5% QOQ.
The Bank’s advances grew 22% YOY and 2% QOQ to `8,58,511crores as on 30th June 2023. Domestic net loans grew 26% YOY and 2% QOQ. Retail loans grew 21% YOY and 2% QOQ to `4,97,810crores and accounted for 58% of the net advances of the Bank. The share of secured retail loans was ~ 77%, with home loans comprising 32% of the retail book. Home loans grew 8% YOY, Personal loans grew 21% YOY, Credit card advances grew 91% YOY, Small Business Banking
(SBB) grew 46% YOY and 8% QOQ, and the rural loan portfolio grew 22% YOY and 1% QOQ. SME book remains well diversified across geographies and sectors and grew 24% YOY to `87,658 crores. Corporate loan book grew 25% YOY and 2% QOQ to `2,73,043 crores of which domestic corporate books grew 36% YOY and 4% QOQ. The mid-corporate book grew 38% YOY. 89% of the corporate book is now rated A- and above with 89% of incremental sanctions in Q1FY24 being to corporates rated A- and above.
The book value of the Bank’s Investments portfolio as on 30th June 2023, was `2,85,397crores, of which `2,29,469 crores were in government securities, while `47,761 crores were invested in corporate bonds and `8,167 crores in other securities such as equities, mutual funds, etc. Out of these, 73% are in Held till Maturity (HTM) category, while 25% of investments are Available for Sale (AFS) and 2% are in Held for Trading (HFT) category.
Payments and Digital
The Bank issued 1.11 million new credit cards in Q1FY24. The Bank has been one of the highest credit card issuers in the country over the last six quarters and has gained an incremental CIF market share of 14% in the last six months1. The Bank continues to remain among the top players in the Retail Digital banking space.
- 95% – Share of digital transactions in the Bank’s total financial transactions by individual customers in Q1FY24 • 76% – New mutual fund SIPs sourced (by volume) through digital channels in Q1FY24
- 72% – Individual Retail term deposits (by volume) opened digitally in Q1FY24
- 70% – SA accounts opened through tab banking in Q1FY24
- 48% – YOY growth in total UPI transaction value in Q1FY24
- 40% – YOY growth in mobile banking transaction volumes in Q1FY24
The Bank’s focus remains on reimagining end-to-end journeys and transforming the core and becoming a partner of choice for ecosystems. Axis Mobile is among the world’s* highest rated mobile banking apps on the Google Play store with rating of 4.8 and over 2 million reviews. The Bank’s mobile app continues to see strong growth, with Monthly Active Users of ~12 million and nearly ~8.4 million non-Axis Bank customers using Axis Mobile and Axis Pay apps. The Bank has been among the first to go live on Account Aggregator (AA) network and has seen strong initial traction in AA-based digital lending. The Bank now has over 100+ partnerships across platforms and ecosystems and has 400+ APIs hosted on its API Developer Portal.
On WhatsApp banking, the Bank now has over 13 million customers on board since its launch in 2021.
Wealth Management Business – Burgundy
- The Bank’s wealth management business is among the largest in India with assets under management (AUM) of `4,28,885crores as at the end of 30th June 2023. Burgundy Private, the Bank’s proposition for high and ultra-high-net-worth clients, covers 9,135 families. The AUM for Burgundy Private increased 87% YOY to `1,59,962crores.
- as per RBI reported data as of Jun’23
- across 64 global banks, 82 fintech, and 9 neo banks on Google Playstore
- across 59 global banks, 8 global neo banks, and 50 Indian fintech apps on Google Play store with 2 mn+ reviews
Capital Adequacy and Shareholders’ Funds
The shareholders’ funds of the Bank grew 10% YOY and stood at `1,30,950crores as on 30th June 2023. As on 30th June 2023, the Capital Adequacy Ratio (CAR) and CET1 ratio including profit for Q1 was 17.74% and 14.38% respectively. Additionally, the Bank held `5,012 crores of COVID provisions, not considered for CAR calculation, providing a cushion of ~50 bps over the reported CAR. The Bank now has a self-sustaining capital structure to fund growth, with net capital accretion through profits to CET-1 of 36 bps for the Q1FY24. The Book value per equity share increased from `389 as of 30th June, 2022 to `425 as of 30th June 2023.
As of 30th June 2023 the Bank’s reported Gross NPA and Net NPA levels were 1.96% and 0.41% respectively as against 2.02% and 0.39% as on 31st March, 2023.
Recoveries from written off accounts for the quarter was `554 crores. Reported net slippages in the quarter adjusted for recoveries from written off pool was `1,131 crores, of which retail was `1,639 crores, CBG was negative `10 crores and Wholesale was negative `498 crores.
Gross slippages during the quarter were `3,990 crores, compared to `3,375 crores in Q4FY23 and `3,684 croresin Q1FY23. Recoveries and upgrades from NPAs during the quarter were `2,305 crores. The Bank in the quarter wrote off NPAs aggregating `2,131 crores.
As on 30th June, 2023, the Bank’s provision coverage, as a proportion of Gross NPAs stood at 80%, as compared to 77% as at 30th June, 2022.
The fund based outstanding of standard restructured loans implemented under resolution framework for COVID-19 related stress (Covid 1.0 and Covid 2.0) declined during the quarter and as at 30th June, 2023 stood at `1,907 crores that translates to 0.21% of the gross customer assets. The Bank carries a provision of ~ 21% on restructured loans, which is in excess of regulatory limits.
As on 30th June, 2023, the Bank had a network of 4,945 domestic branches and extension counters situated in 2,754 centres compared to 4,759 domestic branches and extension counters situated in 2,702 centres as at 30th June, 2022. As on 30thJune, 2023, the Bank had 15,798 ATMs and cash recyclers spread across the country. The Bank’s Axis Virtual Centre is present across six centres with over 1,500 Virtual Relationship Managers as on 30th June 2023.
Key Subsidiaries’ Performance
The Bank’s subsidiaries delivered steady performance with Q1FY24 PAT of `303 crores, up 16% YOY.
- Axis Finance: Axis Finance has been investing in building a strong customer focused franchise. Its overall AUM grew 28% YOY. Retail book grew ~1.5 times and constituted 43% of total loans, up from 6% three years ago. The
focus in its wholesale business continues to be on well rated companies and cash flow backed transactions. Axis Finance remains well capitalized with total Capital Adequacy Ratio of 18.6%. The book quality remains strong with net NPA at 0.38%. Axis Finance Q1FY24 PAT was `123 crores, up 29% YOY from `95 crores in Q1FY23.
- Axis AMC: Axis AMC’s overall AUM grew 13% YOY to `2,52,203crores. Its Q1FY24 PAT stood at `91 crores. • Axis Capital: Axis Capital completed 14 investment banking transactions in Q1FY24.
- Axis Securities: Axis Securities’ broking revenues for Q1FY24 grew 24% YOY to `195 crores. Its Q1FY24 PAT grew 14% YOY and stood at `45 crores.
|Financial Performance||Q1FY24||Q1FY23||% Growth|
|Net Interest Income||11,959||9,384||27%|
|– Fee Income||4,488||3,505||28%|
|– Trading Income||519||(667)||–|
|– Miscellaneous Income||80||90||(11%)|
|Core Operating Revenue#||16,527||12,980||27%|
|Core Operating Profit#||8,295||6,554||27%|
|EPS Diluted (`) annualized||75.40||53.76|
|Return on Average Assets (annualized)||1.80%||1.44%|
|Return on Equity (annualized)||19.17%||15.07%|
# excluding trading income
|Balance Sheet||As on||As on|
|30th June’23||30th June’22|
|CAPITAL AND LIABILITIES|
|Reserves & Surplus||1,30,334||1,18,764|
|Employee Stock Options Outstanding||543||230|
|Other Liabilities and Provisions||57,480||58,796|
|Cash and Balances with RBI and Banks and
Money at Call and Short Notice
Note – Prior period numbers have been regrouped as applicable for comparison.
|Business Performance||As on||As on||% Growth|
|30th June’23||30th June’22|
|Total Deposits (i)+(ii)||9,41,690||8,03,736||17%|
|(i) CASA Deposits||4,28,799||3,51,358||22%|
|– Savings Bank Deposits||2,95,530||2,43,093||22%|
|– Current Account Deposits||1,33,269||1,08,265||23%|
|CASA Deposits as % of Total Deposits||46%||44%|
|(ii) Term Deposits||5,12,891||4,52,378||13%|
|– Retail Term Deposits||3,18,484||2,85,482||12%|
|– Non Retail Term Deposits||1,94,407||1,66,896||16%|
|CASA Deposits on a Quarterly Daily Average Basis (QAB)||3,97,859||3,34,376||19%|
|CASA Deposits as % of Total Deposits (QAB)||44%||43%|
|Net Advances (a) +(b) + (c)||8,58,511||7,01,295||22%|
|Balance Sheet Size||13,02,839||11,52,745||13%|
|Gross NPA as % of Gross Customer Assets||1.96%||2.76%|
|Net NPA as % of Net Customer Assets||0.41%||0.64%|
|Capital Adequacy Ratio (Basel III)||17.08%||17.28%|
|– Tier I||14.24%||15.24%|
|– Tier II||2.84%||2.04%|
|Capital Adequacy Ratio (Basel III) (incl. profit)||17.74%||17.83%|
|– Tier I||14.90%||15.79%|
|– Tier II||2.84%||2.04%|