Overview

Axis Bank (NSE:AXISBANK) is the third largest private sector bank in India. The Bank offers the entire spectrum of financial services to customer segments covering Large and Mid-Corporates, MSME, Agriculture and Retail Businesses.1

The Bank has a large footprint of 4,050 domestic branches (including extension counters) with 11,801 ATMs & 4,917 cash recyclers spread across the country as on 31st March, 2019. The overseas operations of the Bank are spread over eleven international offices with branches at Singapore, Hong Kong, Dubai (at the DIFC), Colombo, Shanghai and Gift City-IBU; representative offices at Dhaka, Dubai, Abu Dhabi, Sharjah and an overseas subsidiary at London, UK. The international offices focus on corporate lending, trade finance, syndication, investment banking and liability businesses.

Axis Bank is one of the first new generation private sector banks to have begun operations in 1994. The Bank was promoted in 1993, jointly by Specified Undertaking of Unit Trust of India (SUUTI) (then known as Unit Trust of India), Life Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC), National Insurance Company Ltd., The New India Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India Insurance Company Ltd. The share holding of Unit Trust of India was subsequently transferred to SUUTI, an entity established in 2003.

With a balance sheet size of Rs. 8,00,997 crores as on 31st March 2019, Axis Bank has achieved consistent growth and with a 5 year CAGR (2013-14 to 2018-19) of 16% in Total Assets, 14% in Total Deposits, 17% in Total Advances.

AXISBANK.jpg

Subsidiaries

The Bank at present has following 11 subsidiaries namely:

  1. Axis Capital Ltd (formerly Enam Securities Direct Pvt. Ltd.) (ACL)
  2. Axis Securities Ltd.. (formerly Axis Securities and Sales Ltd.) (ASL)
  3. Axis Private Equity Ltd. (APE)
  4. Axis Trustee Services Ltd. (ATSL)
  5. Axis Asset Management Company Ltd. (AAMC)
  6. Axis Mutual Fund Trustee Ltd. (AMFT)
  7. Axis Finance Ltd (AFL)
  8. A.TREDS Ltd. (ATL)
  9. Axis Bank UK Ltd. (ABUK)
  10. Freecharge Payment Technologies Private Limited (Freecharge)
  11. Accelyst Solutions Private Limited (Accelyst)

Business overview

Retail Banking

Over the years, the Bank has developed strong relationships with its customers by providing end to end financial solutions for their savings, payments and investments needs through multiple channels. The Bank’s strong digital & technological capabilities, focused execution and wide distribution has helped it to gain market share and improve customer experience. During the financial year 2018-19, Retail segment contributed 81%, 50% and 61% of the Bank’s deposits, advances and Fee Income respectively.2

Retail Deposits

The Bank has clearly identified that deposit growth will drive its balance sheet growth. As a strategy the Bank has shifted its focus from CASA to CASA+RTD. The focus would be to increase penetration in existing Savings Account (SA) base to improve RTD growth and cross sell the Bank’s SA products to its non-SA customers. SA segments like Priority, Burgundy, NRI and Government savings will be primary focus areas of the Bank. New SA customer acquisition to be driven by branches, through scaling up digital SA openings and also leveraging other platform businesses of the Bank.

Savings Bank deposits grew by 4% while the Retail Term Deposits (RTD) grew by 44% during the year. As on 31 March, 2019, the Bank had over 26 million savings account customers, registering a growth of 17%. Total Saving account and Retail Term Deposits grew by 23 % to ` 353,043 crore from ` 285,997 crore in the preceding year.

RTD has been a key driver in growing the retail deposit business. The year saw many new RTD offerings. The Credit Card against FD and overdraft facility against FD were initiatives which helped tackle the issue of premature closures to address liquidity needs for customers. Green Channel RTD was another initiative used to reduce TAT for Trust accounts. Acknowledging the growing impact of mobile, SMS based auto-renewal and other such features to remove friction in the system were introduced. Use of analytics to retain customers with more beneficial and personalized offers has also played a big part in the success of RTD products.

A concerted effort to serve customers better saw the Bank opening several new branches in the financial year. Branches continue to bring in cross sell and upsell opportunities for the Bank, with almost 48% of retail advances being sourced at branches. The Bank has an evenly distributed branch presence across various geographies catering to the needs of diverse customer groups.

During the year the Bank added 347 domestic branches/banking outlets and Nil offshore banking units. The Bank’s geographical reach now extends to 29 states and 6 union territories, covering 2,366 centers and 665 districts. As on 31 March, 2019, the Bank had a network of 4,050 domestic branches/banking outlets as compared to 3,703 last year. Around 16% of the Bank’s branches are in rural areas and 13% of the Bank’s rural branches are in unbanked locations.

As on 31 March, 2019, the Bank had 11,801 ATMs. The Bank was the first private sector Bank to introduce recyclers, which can both accept and dispense cash. As on 31 March, 2019, the Bank had deployed 4,917 recyclers. The recycler handles 66% of the overall cash deposits at the Bank, leading to efficient use of Bank Staff.

Retail Lending

The Bank has grown its Retail Lending portfolio steadily and strongly with a CAGR growth of 23% over the last 5 years and currently stands at `245,812 crore as on 31 March, 2019, up 19% over last year. The Bank continued to increase its share of retail loans to total advances, which stood at 50% as compared to 47% last year.

The proportion of higher yielding Retail Lending products comprising mainly of Personal Loan, Credit Card, Small Business Banking (SBB) stood at 20% as on 31 March 2019 and has consistently increased over the years from 9% as on 31st March 2013. Of the total portfolio, home loans accounted for 38%, auto loans 11% and loans against property 9%. The Bank has been focussing on granularization of the retail loans portfolio, the unsecured retail loans stood at 19% of the total portfolio, with personal loans and credit cards accounting for 12% and 5%, respectively. Growth in Retail Lending was led by Personal Loans, Auto Loans and Small Business Banking Loans.

Building a strong digital channel – As a crucial imperative of establishing a strong digital footprint, the Retail Lending team took significant steps towards increasing the digital presence for loan products by creating a vertical to focus and develop this type of lending. In the first full-fledged year of operations, the digital share of the total business is now at 14.2% of the total sourcing of unsecured Personal Loans. The strong offshoots have shown the scalability of the channel along with the seamless customer experience and lower sourcing cost. The Bank will continue to invest and scale up this opportunity further.

Payments

Payments business plays four important roles in a Bank’s strategy. It is the face of the franchise, increases customer engagement, drives profitability and partnerships. Retail electronic payments in India are growing at a tremendous pace, which has rubbed off positively on cards businesses. Cards business at Axis Bank has delivered consistent strong growth which has resulted in strong fee income contribution over the years. Significant headroom remains for continuing its strategy of acquiring cards customers from the Bank’s existing deposit base.

Despite being a late entrant in payments solutions, the Bank today is ranked amongst the top players in the credit cards business. The Bank had over 5.96 million credit cards in force, making it the 4th largest credit card issuer in the country. The credit cards portfolio saw a substantial increase in spends by 40% to `62,083 crore from `44,329 crore last year. The Bank is one of the largest debit card issuers in the country, with a base of 24.51 million as on 31 March, 2019. The Debit Cards portfolio has seen an increase of 35% in spends from `32,927 crore in to `44,610 crore in FY19.

The Bank’s merchant acquiring business continues to be one of the largest acquirers in the country with a base of 5,07,409 installed terminals of which 2,13,697 terminals are enabled for accepting contactless payments. In addition to scaling up the business, the Bank is also focused on scaling up the business profitably. The Bank is also using digital technologies like Bharat QR to drive high volume-low value payments acceptance use cases. From a merchant’s perspective, the Bank is focused on making payments acceptance simpler and offer value added services that solve business problems.

Digital technologies today allow for several innovations in payments acceptance. During the year, Axis Bank in partnership with Signcatch launched the first of its kind “smart bill pay” initiative for New Delhi Municipal Corporation (NDMC). The solution allows customers to pay their utility bills by just scanning QR code on “personalised smiley fridge magnets” which are mapped to their consumer account number.

Digital Payments continues to be at the core of the Retail Banking strategy. UPI is growing tremendously and the Bank is leveraging UPI to attract non-Axis Bank customers. The Bank was among the early entrants to work closely with NPCI for UPI launch and continues that momentum for UPI 2.0 as well. UPI 2.0 has new features like Overdraft facility, One Time Mandate, Invoice in the Inbox, Signed intent and QR. In addition to UPI 2.0, as per SEBI mandate, IPO investments (ASBA) will move completely to UPI in a phased manner and this new process would increase efficiency, eliminate the need for manual intervention at various stages, and is expected to reduce the time duration from issue closure to listing by up to 3 working days.

UPI has been dominating the peer-to-peer (P2P) payments space in the last two years. Going forward merchant acceptance (P2M) of UPI is set to expand and is expected to gain a substantial share of P2M payments. Total UPI on-boarded merchants today stands at more than 90,000.

The Bank has built a strong technology platform and developer friendly API’s that allow partners, start-ups to plug & play Axis UPI on their mobile applications. The Bank has used this head start to its advantage by making this platform available to multiple partners like Google Pay, Amazon, Uber, Ola Cabs, Samsung Pay, LIC, IRCTC, Big Bazaar, etc. Today the Bank has a share of 11.1 % in UPI transactions, with over 32.58 million UPI IDs on-boarded.

Wealth

The Bank has built one of the best wealth management franchises among banks in the country. Since 2014, the revenues for the business have grown at 43% CAGR and the AUM at 31% CAGR to cross an overall AUM of ` 1,32,702 crore (~[US$ 19.19 billion]). The challenging investment environment notwithstanding, the business continued on its growth trajectory last year to grow the customer base by 12%. This year, Burgundy was re-positioned as the Wealth Management proposition for the affluent customers. The steady growth and healthy mix of the business has also resulted in the industry recognizing the Bank as a leading player in the wealth management industry. Axis Bank was ranked 4th largest amongst private banks and wealth management firms in India by Asian Private Banker in its 2017 India AUM league table.

As a part of the endeavour to provide an enriching banking experience to NRI customers and provide them seamless assistance in fulfilling their banking requirements, the Bank has introduced NRI Digital Relationship Managers who service customers’ as per the local timings in their country of residence and aim to strengthen the relationship and create value for the customers as well as for the Bank.

Remittance business

Globally, inward remittance is a $600 Bn market with $69 Bn being transferred specifically to India (Source: World Bank, 2017). Customers are moving from brick and mortar modes to digital platforms to transfer funds. The top 10 digital players are contributing $80 Bn funds transfers globally.

The Bank offers a range of forex and remittances products to its retail customers, which include forex cards, inward and outward wire transfers, traveller’s cheques and foreign currency notes, remittance facilities through online portal as well as through collaboration with correspondent banks and exchange houses. The Bank offers remittances facility to NRI customers through the Bank’s Sri Lanka Branch and Axis Bank UK Ltd., for remittances to India. Additionally, the Bank offers remittances from Gulf Co- operation Council (GCC) region to Sri Lanka through tie-up with four exchange houses.

The Bank launched RemitMoney in November 2016 with the vision of making money transfers to India fast, economical, safe & seamless. Over the past 21 months the Bank has continuously reinvented at each and every step by listening to customers & building what they wanted. In October’18, the Bank launched the new RemitMoney website with an interactive interface and enhanced features. Some of the enhanced features include Instant money transfer (within 1 Hour) to India, 24x7 Customer support over chat, email and call, cashpoints reward program to increase loyalty, and scheduling future transfers. With thoughtful user experience design, the Bank has reduced the time taken to initiate the 1st transfer from 5 minutes to less than 1 minute and a 30 second time frame to initiate a repeat transaction.

The Bank continues to have a market leadership position in forex cards with 16 currency options other than INR being offered. Additionally, the Bank offers Miles & More Multi-Currency Forex Card in association with Lufthansa airline aimed at frequent flyers, an industry first in this segment.

Third Party Distribution

The Bank today is one of the leading distributors of mutual fund schemes in India and ranks among the top 5 distributors in terms of Assets under Management (AUM). The Bank distributes Mutual Funds schemes of 13 major Asset Management Companies, through its diversified branch network and digital channels based on a thorough analysis of the customers’ lifecycle and investment requirements. The Bank has over 1 million mutual fund customers. The Bank won the Best Performing Bank – Private at the UTI Mutual Fund and CNBC TV18 Financial Advisor Awards 2017-18 and has been nominated for Wall of Fame year 2018-19.

The Bank also offers online trading services to its customers in collaboration with Axis Securities Ltd. (a 100% subsidiary of the Bank) under the name Axis Direct. Axis Direct crossed 2 million total customers during the year. The Bank has a tie up with Max Life and Life Insurance Corporation of India for distributing life insurance products. The Bank continues to provide the best choice of products across both insurance companies to cater to the financial security of Customers and has secured the lives of over 1.2 million customers since the inception of the partnerships.

In General Insurance, the Bank has a tie up with TATA AIG General Insurance Co. Ltd. (American International Group) and for Health Insurance with Apollo Munich Health Insurance Co. Ltd. Mutual Fund & Insurance Distribution contributed 19% of total retail bank fee income in FY 2018-19.

Wholesale Banking

The financial year 2018-19 has been a year of consolidation for the corporate segment with modest growth. The asset quality issues which have been affecting the banking sector in the last few years finally appeared to be coming under control with majority of the bad loans getting recognised and provided for. The year witnessed the resolution of a few large stressed accounts referred to NCLT under Insolvency and Bankruptcy Code resulting in better recovery for banks.

The credit offtake for the corporate segment improved marginally during financial year 2018-19 compared to previous fiscal. Notwithstanding the transient effects associated with the implementation of the Goods and Services Tax (GST) regime in the initial part of the year, the credit growth to industry had improved to about 14% by 2019 vis a vis 11% growth in March 2018. Credit growth has been witnessed in Infrastructure, Engineering, Chemicals, Oil and Gas segments while Basic Metal and Metal products, Textiles and Gems & Jewellery segments continued to reflect sluggish demand scenario. Services sector continues to reflect high growth.

The Bank is creating an integrated franchise by re-organising its existing coverage groups. The Bank has revamped its risk appetite and internal processes to ensure new lending business is of much healthier quality. The Bank’s strategic focus in recent years has been towards building a higher rated lending book, increase the share of working capital loans and reducing the concentration risk.

The Corporate lending business in Axis Bank continued to emphasise doing business with higher rated corporates focussing on having higher share of the cash flows of these corporates through working capital facilities and Cash Management Services arrangements. The Bank also participated in some of the NCLT related resolution cases funding marquee groups and high rated corporates. Approximately 95% of new sanctions in the corporate book were to companies rated ‘A-‘ or better. Presently, 82% of outstanding standard corporate book is to companies rated ‘A’ and above. During the year, the share of working capital exposures to overall corporate loan book increased from 32% in 2018 to 34% in 2019.

Further Portfolio diversification through a sectoral approach to credit has helped the Bank to continue reducing the concentration risk.Concentration risk has seen a steady decline in the last few years with exposure to top 20 single borrowers as percentage of Tier-1 capital improving to 112% as on 31.03.2019 vis a vis at 121% as on end March 2018.

During the fiscal 2019, the Bank’s corporate loan growth was 5% with working capital loans growing by 11% YOY. The Bank’s domestic corporate loan book growth was strong with a YoY growth of 17%. The Bank continued to implement its strategy of de-growing the overseas loan book aligned to the focus shift of top business houses to tap opportunities in the domestic market.

The Wholesale Banking business continues to focus on customers such as the Government, Strategic, Large and Mid-Corporates, and SMEs. The Bank started new relationships as well as deepened relationships with many Navratnas and Maharatnas Public Sector Undertakings (PSUs) during the year as PSUs continue to remain focused client group for the Bank.

The Bank along with its subsidiaries addresses most of financial services requirements of a corporate be it borrowing, trade finance, cash management, remittances, investment banking, security services etc. The holistic approach has moved the Bank away from a sales based approach of offering corporate credit to providing an entire bouquet of products and services.

Treasury

The Bank’s Treasury function comprises Asset Liability Management (ALM), Proprietary trading business in Interest rates & Equity, Foreign Exchange & Derivatives and Arrangership business.

The ALM group manages the regulatory requirements of Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR) and Liquidity Coverage Ratio (LCR). The group also manages the liquidity, interest rate and currency risks in the Bank’s portfolio, under the guidance of the Asset Liability Committee (ALCO) of the Bank. ALM group is responsible for overall liquidity management of the domestic book and longer term liquidity management of the overseas branches across geographies.

The proprietary trading group deals in Government securities within Treasury, and plays an important role of market making, participating in primary auctions of RBI etc. The Bank also holds one of the largest Corporate bond investment portfolio with 98% of them rated ‘A’ and above, and also trades in money market instruments and Equity.

Forex Trading Group is a major participant in the Foreign Exchange and Derivatives market. It undertakes proprietary trading and market making in forex and derivatives products. It provides complete risk management and hedging solutions to retail and corporate customers and services institutional clients.

The Bank continues to remain a dominant player in the Debt Capital Market (DCM) segment. During the calendar year 2018, the Bank arranged bonds and debentures of `80,770 crore with a market share of 20% and `52,041 crore for March quarter end of calendar year 2019 with a market share of 32%. The Bank has been ranked number one in the Bloomberg league table for domestic bonds in India for the 12th consecutive year for calendar year 2018.

During the year, the Bank was awarded Best DCM House in India by Finance Asia. The Bank was also ranked number one arranger – ‘Investors’ Choice for primary issues - Corporate bonds – INR’ by The Asset Benchmark Research.

Transaction Banking

The Transaction Banking unit focuses on flow businesses, i.e. current accounts, collection & payments solutions, trade services, forex remittances and capital market solutions. It caters to corporates, SMEs, sole proprietors, financial institutions & government segment. The key financial deliverables of the business are current account float balances and fee income. Current account balances de- grew from `95,650 crore as on 31 March, 2018 to `89,265 crore as on 31 March, 2019, a year on year decline of 7%. Daily average balances in current accounts grew 6%, from `60,154 crore in fiscal 2018 to `64,006 crore in fiscal 2019. The business generated a fee income of `1,936 crore in fiscal 2019, a growth of 10% year on year.

The key themes that the business has been focusing on are deepening share of wallet for existing clients, offering digital solutions as well as various collection & payment solutions to customers and enhancing customer service. The Relationship Managers and branches are continuously equipped with analytical tools and learning interventions to help cross-sell the large suite of transaction banking products of the Bank to customers.

Current Accounts

The Bank has over 1.8 million current accounts and caters to the customers various requirements through a plethora of customized offerings. The Bank has made significant strides in embracing digital platforms and alternate channel migration. Further, the Bank continues to remain focussed on deepening the current account relationship by offering the right cross-sell products as per customers need across cash management solutions, tax payments, loans, trade & forex products.

Cash Management Solutions

The Bank provides comprehensive and customizable cash management solutions that enable faster fund movement by leveraging the Bank’s extensive branch network backed by state-of-the-art technological systems. To provide a seamless experience to its customers, the Bank has integrated all its digital products onto its new Corporate Internet Banking platform. The Bank also provides digital bulk payment solutions that include front-end file-upload for various payments and ERP integration for corporates that engage in high number of transactions. While the Bank continues to drive strong collections business from its branch network, the Bank has launched new digital receivables management products focused on corporates and SME, enhancing the customer experience through modern standards of digital banking on web and mobile interfaces. The Bank has also enabled the facility of 24x7 access to end-customers towards National Automated Clearing House (NACH) mandate registration for regular collections with enhanced security via NetBanking authentication.

FasTag Project has been initiatied by NHAI in partnership with major banks with an objective of digitizing toll payments in the country. Axis Bank is one of the major banks in this business.

Government Business

The Bank has been authorised by Reserve Bank of India and Government of India (GOI) to handle all Government Banking

transactions which includes the following:

  • Collection of Direct taxes
  • Collection of GST in all branches in online as well as offline mode
  • Disbursement of Central Civil as well as Defence Pensions
  • Accredited by Reserve Bank of India as one of the authorized bankers for the Ministry Of Urban Development, Ministry of Housing and Poverty Alleviation, Controller General of Accounts and Institute of Government accounts and finance

Trade, Forex and risk management Services

The Bank offers a complete suite of Trade finance and foreign exchange business solutions through Forex “B” category branches spread across the country. The Bank also offers a variety of hedging solutions such as exchange and interest rate derivative structures, including forwards, options and swaps in accordance with the regulatory guidelines and derivative policy of the Bank. In addition to the services offered through the branch and subsidiary network spread across India, the Bank also leverages its tie-ups with reputed correspondent banks across the world to offer these services to overseas customers.

Axis is one of the few private sector banks that has been on-boarded as advisory bank in Government e-Marketplace (GeM). This tie-up enables the Bank to offer automated solutions for advising electronic performance guarantees (e-PBG) to Government departments /organisations /PSUs with value added features like integrated responses and faster turnaround time.

Custodial and Capital Market Services

The major activities undertaken by the Capital Market Division are fund based and non-fund based credit facilities, clearing bank activities, Professional Clearing Member Services (PCM), NSCCL custodian services, fund accounting services, IPOs, dividend distribution & escrow services.

The Bank acts as a clearing bank and professional clearing member across exchanges in India providing clearing member services and funds clearing solutions to exchange members. The Bank is also a SEBI registered custodian of securities, servicing various segments of clients viz. Foreign Portfolio Investors, Foreign Direct Investors, Portfolio Management Service Providers, and Foreign Venture Capital Investors etc. Assets under custody services as at end of fiscal 2019 stood at `61,303 crore, up from `58,224 crore in fiscal 2018.

Lending to Small and Medium Enterprises

SMEs are the backbone of its economy, play a pivotal role in employment generation and contribute significantly to overall economic activity. As per MSME Annual Report 2017-18 issued by Ministry of MSME GOI, there are an estimated 63.3 million MSME units across the Country creating 111 million jobs. With the Indian economy emerging as one of the leading economies of the World, major impetus is being given to strengthen the SME sector.

The Bank is committed towards providing timely, adequate and hassle free business solutions to SME Sector. The Bank has created a bouquet of lending products offering Working Capital, Term Loan, Trade Finance, Project Finance and Bill / Invoice Discounting etc to meet the dynamic credit needs of MSMEs across the Country. The Bank has a strong network across the country offering best in class service through 78 dedicated SME Centres and more than 3,900 Branches.

The Bank has created a dedicated SME business unit to have a focussed approach towards the SME Sector, comprising of three business verticals namely Medium Enterprises Group (MEG), Small Enterprises Group (SEG) and Supply Chain Finance (SCF). The SME Business in the Bank continues to focus towards lending to the Priority sector (PSL) and is a significant contributor to the Bank’s overall PSL portfolio. During the fiscal, the Bank’s SME advances grew at 12% to `65,584 crore from `58,740 crore last year. The SME portfolio of the Bank constituted 13% of the Bank’s total advances as on 31 March, 2019.

The Bank sees immense potential for growth in the SME sector across the country. The Bank has been taking several initiatives to support the growth and development of MSME sector. The Bank organises “Evolve” series - an educational initiative for SMEs every year. The series is now regarded as a signature initiative of Axis Bank in building SME capacity. The 5th edition of Evolve was organised this year around the concept “Unlocking Growth through Innovation” in 31 cities across the Country where more than 3,200 SMEs participated.

To recognize the efforts and contributions of SMEs, Axis Bank has joined hands with the India SME Forum to felicitate successful SMEs through INDIA SME 100 Awards, which is considered as one of the most prestigious awards in the SME fraternity. With this association, the Bank hopes to inspire able SMEs that have the potential to be world class enterprises and offer a platform to promote to their partners, investors and collaborators and ensure long term sustainable growth.

There has been a lot of focus to encourage the SME sector to go digital. With strong processes and robust IT support, Axis Bank is well poised to drive this digital transformation and create an enabling environment for its esteemed customers. Asset quality in the SME segment has remained stable with strong focus on sourcing high rated customers. The Bank also has effective monitoring and Early Warning Systems in place which help to take corrective action when necessary.

Financial highlights

On 22 January  2020 bank announced its 3rd quarter ending 31 December 2019.

The Bank’s operating profit for the quarter was `5,743 crores, up 4% YOY from `5,525 crores in Q3FY19. Q3FY19 had witnessed one large recovery in an account in the Steel sector. Adjusted for that one-off item, the Bank’s operating profit for the quarter grew 22% YOY. For 9MFY20 period, the operating profit grew 26% YOY to `17,587 crores. Net profit for Q3FY20 increased 5% YOY to `1,757 crores from `1,681 crores in Q3FY19; for 9MFY20 Net profit de-grew 5% YOY to `3,015 crores, driven by the DTA charge taken in Q2 to incorporate revised corporate tax rates.3

The Bank’s Net Interest Income (NII) grew 15% YOY to `6,453 crores during Q3FY20 from `5,604 crores in Q3FY19. NII for 9MFY20 rose 15% YOY to `18,398 crores from `16,003 crores in 9MFY19. Net interest margin for Q3FY20 stood at 3.57%, NIM for 9MFY20 stood at 3.49%.

The Bank’s balance sheet grew 8% YOY and stood at `8,19,039 crores as on 31 st December 2019. The Bank’s advances grew 16% YOY to `5,50,138 crores as on 31 st December 2019. Domestic loans grew 18% while the overseas book de-grew by 7%. Retail loans grew 25% YOY to `2,91,554 crores and accounted for 53% of the net advances of the Bank. The growth in Retail advances was driven by all product segments across home loans, auto loans, personal loans, small business loans etc. The share of unsecured loans comprising of Personal loans and Credit Cards has been stable YOY at 17% of Retail book. The company continue to see stable risk in Home loans, LAP, Personal loans and Credit Cards. SME loan book stood at `61,741 crores. Corporate loan book grew by 9%, with domestic corporate loan book up 16%. The Bank’s loan to deposit ratio stood at 93%.

The book value of the Bank’s Investments portfolio as on 31 st December 2019, was `1,55,979 crores, of which `1,21,689 crores were in government securities, while `24,410 crores were invested in corporate bonds and `9,880 crores in other securities such as equities, preference shares, mutual funds, etc.

The total deposits on quarterly average basis (QAB) grew by 21%. CASA and Retail Term Deposits on a QAB basis put together recorded a growth of 21% YOY. On a period end basis, the total deposits grew 15% YOY. The share of CASA and Retail Term Deposits in the Total Deposits stood at 82% as on 31 st December 2019.

The shareholders’ funds of the Bank grew 29% YOY and stood at `86,198 crores as on 31 st December 2019. Under Basel III, the Capital Adequacy Ratio (CAR) and Tier I CAR (including net profit for 9MFY20) as on 31 st December 2019 were 18.72% and 15.54% respectively.

As on 31 st December 2019, the Bank’s Gross NPA and Net NPA levels were 5.00% and 2.09% respectively, as against 5.03% and 1.99% respectively as on 30 th September 2019. As on 31 st December 2019, the Bank’s Gross NPA stood at `30,073 crores and Net NPA stood at `12,160 crores. As on 31 st December 2019, the Bank’s provision coverage, as a proportion of Gross NPAs including prudential write-offs, stood at 78%

Recent developments

On 17 April 2020, credit rating agency S&P Global Ratings have today revised the rating outlook of the Bank to negative from stable. The issuer credit rating of the Bank has been reaffirmed as BBB-. The rating action letter by S&P Global Ratings containing the reason for above downgrade is attached herewith.4

Earlier on 3 April 2020 credit rating agency Moody's has today revised the outlook for the Bank from stable to negative. Further, it has downgraded the counterparty risk assessments of the Bank to Baa3(cr)/P-3(cr) from Baa2(cr)/P-2(cr), and the local currency counterparty risk rating of the Bank to Baa3/P-3 from Baa2/P-2. The rating action letter by Moody's containing the reason for above downgrade is attached herewith.5

Axis Bank Consolidated December 2020 Net Interest Income (NII) at Rs 7,505.09 crore, up 14.19% Y-o-Y 6

January 25, 2021; Reported Consolidated quarterly numbers for Axis Bank are:

  • Net Interest Income (NII) at Rs 7,505.09 crore in December 2020 up 14.19% from Rs. 6572.31 crore in December 2019.
  • Quarterly Net Profit at Rs. 1,317.91 crore in December 2020 down 29.74% from Rs. 1,875.72 crore in December 2019.
  • Operating Profit stands at Rs. 6,410.09 crore in December 2020 up 7.98% from Rs. 5,936.18 crore in December 2019.
  • Axis Bank EPS has decreased to Rs. 4.31 in December 2020 from Rs. 6.65 in December 2019.

References

  1. ^ https://www.axisbank.com/about-us/corporate-profile
  2. ^ https://www.bseindia.com/bseplus/AnnualReport/532215/5322150319.pdf
  3. ^ https://www.bseindia.com/xml-data/corpfiling/AttachHis/baeecf5d-d537-43fc-bb8b-ba5b7b1ca5be.pdf
  4. ^ https://www.bseindia.com/xml-data/corpfiling/AttachHis/2ca041ce-78c5-4577-930d-a422c2f20085.pdf
  5. ^ https://www.bseindia.com/xml-data/corpfiling/AttachHis/16cc2e7b-0629-4806-9179-e6f627809076.pdf
  6. ^ https://www.moneycontrol.com/news/business/earnings/axis-bank-consolidated-december-2020-net-interest-income-nii-at-rs-7505-09-crore-up-14-19-y-o-y-6405941.html
Tags: IN:AXISBANK
Created by Asif Farooqui on 2020/04/20 06:08
     
This site is funded and maintained by Fintel.io