BENGALURU (Reuters) – Indian private lender Axis Bank reported a better-than-expected 70% jump in second-quarter profit on Thursday, as bad loan provisions slid and asset quality improved.
Net profit rose to 53.3 billion rupees ($644.72 million) in the three months to Sept. 30 from 31.33 billion rupees a year ago, Mumbai-based Axis Bank said in an exchange filing.
Analysts on average had expected a profit of 44.37 billion rupees, according to Refinitiv IBES data.
Net interest income grew 31%, aided by better margins.
Provisions for bad loans dropped 68% year-on-year to 5.5 billion rupees, while the gross bad loan ratio, a measure of asset quality, improved to 2.50% at the end of September from 2.76% at end-June.
Indian banks are expected to report strong profit growth for the September quarter as lending improved despite a slew of rate hikes by the central bank to tame high inflation. However, analysts have been sceptical about Axis Bank’s loan and margin growth which have lagged peers.
For the second quarter, Axis Bank’s net advances grew 18% year-on-year and 4% compared to the previous quarter. Larger peer HDFC Bank last week reported a 23.4% on-year growth in loans.
Net interest margin, a key measure of profitability, rose to 3.96% from 3.39% in the same period a year earlier.
The bank expects to close its deal with Citigroup Inc by the end of the fourth quarter of this financial year and has no immediate plans for raising capital, said Axis Bank Managing Director And Chief Executive Amitabh Chaudhry in a post earnings call.
The deal to acquire Citi’s local consumer banking firm for $1.6 billion, to bulk up Axis Bank’s credit card and retail business in the country, was announced in March.
(Reporting by Chris Thomas in Bengaluru and Nupur Anand in Mumbai; Editing by Subhranshu Sahu)
