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Axis Bank Reports Loss In Q4 On Citi Deal
“We delivered strong growth across all business segments and successfully completed the Citi acquisition. We have taken a one-time non-recurring charge to that effect,” said Amitabh Chaudhry, MD of Axis Bank
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Axis Bank posted a net loss of 5,728.4 crore for the fiscal quarter that ended 31 March due to a one-time charge from its acquisition of Citibank's India consumer division.
The overall cost of the transaction is Rs 12,490 crore, which the bank absorbed in the March quarter. Without the impact of the unusual item associated with the acquisition, the lender would have posted a profit of 6,625 crore, up 61 per cent from 4,118 crore the previous year.
“We delivered strong growth across all business segments and successfully completed the Citi acquisition. We have taken a one-time non-recurring charge to that effect,” said Amitabh Chaudhry, MD of Axis Bank. “We are growing faster than the industry. We observed overall business growth as well as market-leading growth in our key categories.”
The bank had a net profit of 9,580 crore for the fiscal year 2023 as a whole.
Net interest income for the quarter increased 33 per cent year on year to 11,742 crore. The NII for the previous year was Rs. 8,819 crore.
The March quarter net interest margin was 4.22 per cent, up 73 basis points year on year.
Asset quality indicators were positive, with the gross non-performing asset ratio coming in at 2.02 per cent for the March quarter, down from 2.82 per cent the previous year. The net non-performing asset ratio was 0.39 per cent in the third quarter, down from 0.73 per cent the previous year.
The quarter's gross slippages were 3,375 crore, compared to 3,807 crore the previous year. During the quarter, bad loan recoveries and upgrades totalled 2,699 crore. During the quarter, the lender also wrote off bad loans totalling Rs. 2,429 crore.
Provisions for the quarter were 306 crore, down 69 per cent year on year. This figure was 987 crore a year ago.
Total loans increased 19 per cent year on year, bringing the bank's total book to 8.45 lakh crore in the March quarter.
Domestic net loans increased by 23 per cent year on year. Retail loans increased by 22 per cent year on year to 4.88 lakh crore, accounting for 58 per cent of the bank's net advances.
“Corporate credit growth has been strong and broad-based,” said Axis Bank's deputy managing director Rajiv Anand. “We've seen interest in both term loans and working capital. We are seeing increased demand for private capital expenditure across sectors and we are engaging in it.”
Small business banking increased by 50 per cent year on year, while the rural loan portfolio increased by 26 per cent. Credit card advances increased 97 per cent year on year as a result of the Citi portfolio acquisition. Total deposits increased by 15 per cent, bringing the deposit book to 9.46 lakh crore.