About the company:
Axis Bank Limited is one of the largest private sector banks in India, offering a wide range of financial services, including retail and corporate banking, treasury operations, and wealth management. Established in 1993 and headquartered in Mumbai, the bank serves individuals, businesses, and government clients through a vast network of branches, ATMs, and digital platforms. Axis Bank is known for its strong digital banking presence, innovative financial products, and customer-centric approach.
Strategic Priorities
Resilient Franchise: Focus on deposit growth, asset quality, and cost efficiency.
Competitive Advantage: Strengthening partnerships, technology, and product innovation.
Future Growth: Investment in digital banking, rural banking, and sustainable finance.
Deposit Strategy:
Enhanced quality and stability of deposits.
130 new branches opened in Q3FY25, 330 in 9MFY25.
Premiumization continues with 26% YoY growth in Burgundy AUM.
Retail & Asset Quality:
Unsecured loan stress is rising industry-wide (personal loans, credit cards, MFI).
Microfinance loans are only ~1% of retail loans, but Axis is cautious in this segment.
Strengthened collections and monitoring to manage risks.
Digital & Business Expansion:
Launched UPI for senior citizens, personal finance management tools.
IFC partnership for $500M green financing.
Strengthened corporate banking solutions for transaction banking growth.
Macro Challenges: Uncertain economic environment, rising unsecured loan delinquencies.
Loan Growth Constraint: Deposit growth limiting credit expansion, but Axis is focused on sustainable asset growth.
Cost Management: Opex to assets declined to 2.48%, ongoing efficiency improvements.
Provisioning: Higher credit costs due to stricter provisioning policies; expect stabilization.
Industry Trends: Unsecured loan delinquencies remain a concern, with ongoing recalibration in lending strategy.
Here are Axis Bank’s financials for the last three quarters based on the Q3FY25 earnings call:
| Metric | Q3FY25 | Q2FY25 | Q1FY25 |
|---|---|---|---|
| Net Interest Income (NII) | ₹13,606 Cr (+9% YoY, +1% QoQ) | ₹13,467 Cr (+18% YoY) | ₹13,088 Cr (+27% YoY) |
| Fee Income | ₹5,455 Cr (+6% YoY) | ₹5,620 Cr (+8% YoY) | ₹5,200 Cr (+10% YoY) |
| Operating Profit | ₹10,102 Cr (+14% YoY, +5% QoQ) | ₹9,622 Cr (+11% YoY) | ₹9,586 Cr (+10% YoY) |
| PAT (Net Profit) | ₹6,304 Cr (+4% YoY) | ₹6,380 Cr (+10% YoY) | ₹6,572 Cr (+12% YoY) |
| Cost-to-Income Ratio | 47% (Improved 247 bps YoY) | 48% | 49% |
| ROA (Return on Assets) | 1.71% | 1.75% | 1.80% |
| ROE (Return on Equity) | 15.8% | 16.5% | 17.0% |
| Gross NPA Ratio | 1.46% (Down 12 bps YoY) | 1.51% | 1.54% |
| Net NPA Ratio | 0.35% | 0.36% | 0.37% |
| Provision Coverage Ratio (PCR) | 76% | 76% | 77% |
| Credit Cost (Net) | 0.80% | 0.54% | 0.50% |
| CASA Ratio (QAB Basis) | 39% | 39.5% | 40% |
| Loan Growth (YoY) | 16% | 18% | 19% |
| Deposit Growth (YoY) | 13% | 14% | 15% |
| CET-1 Ratio (Capital Adequacy) | 14.61% | 14.12% | 13.74% |
Recent updates:
Highlights from last concall:
Axis Bank Q3FY25 Earnings Call Summary (January 16, 2025)
Core Operating Profit: Up 14% YoY, 5% QoQ, driven by healthy income growth and controlled expense growth.
Deposits: Grew 13% YoY, 3% QoQ (quarterly average balance).
Loan Growth: Focused segments (Small Business, SME, Mid-corporate) grew 16% YoY, 4% QoQ.
CASA Ratio & Fee to Average Assets: Among the best in private banks.
ROA & ROE: Consolidated ROA at 1.71%, ROE at 15.8%.
Capital Position: CET1 ratio at 14.61%, improved by 49 bps in Q3FY25 and 87 bps in 9MFY25.