Profit path

Mumbai, April 24: Axis Bank, the country’s third-largest private bank, today reported a better-than-expected 22 per cent jump in net profit at Rs 1,555 crore for the fourth quarter ended March 2013 from Rs 1,277 crore a year ago.

Higher loan growth, particularly retail, provided the boost. Advances during the period grew 16 per cent year-on-year to Rs 1.97 lakh crore as on March 31, 2013. Retail loans rose 44 per cent to Rs 53,960 crore and accounted for 27 per cent of the net advances compared with 22 per cent last year. Loans to small and medium enterprises recorded a healthy growth of 26 per cent over the previous year.

“We were under-served in the retail segment which we are growing now. Retail assets have grown to 27 per cent from 22 per cent and I see them touching 30 per cent by the end of FY14 (2013-14),” Axis Bank executive director Somnath Sengupta told reporters in a conference call.

Another factor behind the jump in net profit was the fee income, which rose 22 per cent to Rs 1,618 crore during the period. Higher fee income helped the other income rise 26 per cent to Rs 2,007 crore.

The share of low-cost current and savings account deposits improved to 44 per cent as on March 2013 against 42 per cent a year ago.

Savings bank deposits grew 23 per cent to 63,778 crore as on March 31, while current account deposit rose 22 per cent to Rs 48,322 crore.

This led to a strong growth in the net interest income (NII), or the difference between interest earned and interest paid.

Interest income

The bank’s NII rose 24 per cent during the quarter at Rs 2,665 crore against Rs 2,146 crore last year.

The net interest margin (NIM) widened to 3.70 per cent, but Sengupta said it would go down to 3.25-3.50 per cent.

The lender witnessed a three-fold spike in provisions at Rs 595.35 crore from the year ago’s Rs 139.28 crore because of additional Rs 240 crore being put into a special contingency fund during the quarter, Sengupta said.

The bank said it had appointed KPMG to do a forensic audit, following a sting operation done by Cobrapost that alleged executives of the private lender had indulged in money laundering.