A customer enters a branch of Axis Bank in Mumbai, India, January 22, 2018. REUTERS/Danish Siddiqui/File Photo Acquire Licensing Rights
BENGALURU, Oct 25 (Reuters) – India’s Axis Bank (AXBK.NS) reported a better-than-expected profit rise for the second-quarter on Wednesday, helped by strong growth in loans.
The Mumbai-based private lender’s standalone net profit climbed 10% to 58.64 billion rupees ($705.20 million) in the three months to Sept. 30 from a year earlier, it said in an exchange filing.
Analysts had expected a profit of 56.76 billion rupees, per LSEG data.
The standalone numbers do not include the business of the bank’s subsidiaries.
Loan demand during the September quarter stayed strong as an uptick in consumer spending helped drive retail credit. The festive season is expected to further boost spending.
“With the upcoming festivities, we are already seeing a surge in demand, which augurs well for business,” Axis Bank chief executive Amitabh Chaudhry said in a statement.
Net interest income – the difference between interest earned and interest expended – rose 19% to 123.15 billion rupees in the quarter, from 103.6 billion rupees a year ago.
Net interest margin, a barometer of the bank’s profitability, increased to 4.11% in the September quarter, up 15 basis points from a year ago, and up 1 basis point from the earlier quarter.
Indian banks have experienced margin pressure in the last two quarters as deposits were re-priced with a lag following the 250-basis-point rise in policy interest rates since May 2022.
The country’s top lender HDFC Bank (HDBK.NS) reported a drop in margins earlier this month, while IndusInd Bank (INBK.NS), ICICI Bank (ICBK.NS), and Kotak Mahindra Bank (KTKM.NS) all reported second-quarter profit gains.
Axis Bank’s asset quality improved in July-September, with gross non-performing assets ratio easing to 1.73% from 1.96% in the last quarter.
Provisions and contingencies, or funds set aside to cover loan losses, were down 21.2% from the previous quarter to 8.15 billion rupees.
($1=83.1533 Indian rupees)
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Reporting by Sethuraman NR and Varun Vyas in Bengaluru; Editing by Mrigank Dhaniwala
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