Axis Bank’ Q1 results presented a mixed picture. The bank reported a year-on-year (YoY) growth in net profit, but it fell short of analysts’ expectations.

Key Highlights

1. Net Profit: Axis Bank reported a net profit of INR 5,797 crores, a significant increase compared to the previous year’s INR 4,125 crores. This 40.5% year-on-year growth underscores the bank’s effective cost management and revenue growth.
2. Revenue Growth: The bank’s total income for Q1 FY2024 stood at INR 24,050 crores, up from INR 20,680 crores in Q1 FY2023, marking a 16.3% increase. This growth is driven by higher interest income and fee-based income.
3. Net Interest Income (NII): NII, the core income of the bank, increased by 25% to INR 10,100 crores from INR 8,080 crores in the same quarter last year. This growth is attributed to an expansion in the loan book and improved net interest margins.
4. Net Interest Margin (NIM): NIM for Q1 FY2024 improved to 4.05%, reflecting better asset-liability management and an increase in high-yielding loans.
5. Non-Interest Income: The bank’s non-interest income, including fees and commissions, rose by 18% to INR 4,800 crores, driven by strong performance in transaction banking and retail banking fees.
6. Operating Expenses: Operating expenses increased by 10% to INR 7,300 crores, primarily due to investments in technology and network expansion. However, the cost-to-income ratio improved to 45.5% from 47.3%, indicating better efficiency.

Asset Quality

Axis Bank maintained a strong focus on asset quality. The Gross Non-Performing Assets (GNPA) ratio improved to 2.55%, down from 3.35% in Q1 FY2023. The Net NPA ratio also improved to 0.65% from 0.85%. Provisions and contingencies decreased by 20%, reflecting improved asset quality.

Loan Book and Deposits

1. Loan Growth: The bank’s loan book expanded by 18% year-on-year to INR 7.5 lakh crores, driven by strong growth in retail, SME, and corporate loans.
2. Deposit Growth: Total deposits grew by 15% to INR 8.1 lakh crores, with Current Account Savings Account (CASA) deposits contributing significantly, reflecting a stable funding base.

Digital and Technological Initiatives

Axis Bank continued to invest in digital and technological advancements to enhance customer experience and operational efficiency. The bank reported a 25% increase in digital transaction volumes, highlighting the success of its digital banking platforms. Axis Bank Q1 results demonstrate strong financial health, marked by robust profit growth, improved asset quality, and strategic investments in technology. As the bank continues to navigate economic challenges, its commitment to growth and efficiency positions it well for sustained success