OREANDA-NEWS. July 27, 2011. Axis Bank announces Q1FY12 net profit of 942 crore. up by 27% YoY.

Results at a Glance

•           Net Profit during Q1 FY12 rose to 942.35 crore from 741.88 crore in Q1FY11, registering a growth of 27.02% YOY.

•           Demand Deposits grew by 25.59% YOY to 74,414 crore during Q1 FY12 from 59,249 crore during Q1FY11, with Savings Bank deposits growing by 23.62% YOY and Current Account deposits by 28.39%.

•           The YOY growth in Net Interest Income and Fee Income during Q1FY12 was 13.89% and 42.24%

respectively. Net Interest Margin during Q1 FY12 was 3.28% compared to 3.71% in Q1 FY11.

•           The Bank is well-capitalised with a Capital Adequacy Ratio of 12.53% (without reckoning Q1FY12 profit, as stipulated by Reserve Bank of India) as at the end of Q1FY12 compared to 14.54% as at the end of Q1FY11 and 12.65% at the end of FY11. Tier-I capital was 9.36% as at the end of Q1FY12, as against 10.32% at the end of Q1FY11 and 9.41% at the end of FY2011.

Financial Highlights

• Net Interest Income (NII) and Net Interest Margin (NIM)

The Bank continued to extend its presence across the country and at the end of Q1 FY12, had a network of 1,411 domestic branches and extension counters, and 6,871 ATMs situated in 932 cities and towns. During the quarter, the Bank added 21 branches and 601 ATMs. The daily average balances of Savings Bank deposits during the quarter grew 22.46% YOY and those of Current Account deposits grew 15.76% YOY. Demand deposits constituted 36.83% of the aggregate daily average deposits during Q1FY12, lower than the level of 39.94% in Q1FY11. At the end of the quarter, Current Account and Savings Bank deposits together accounted for 40.53% of the total deposits of the Bank. The Bank posted a NIM of 3.28% during Q1 FY12, compared to 3.71% during Q1FY11 and lower than the NIM of 3.44% during Q4FY11. The reduction in NIM during Q1 FY12 was driven by a slower build up in CASA deposits leading to persistence of higher cost term deposits plus upward revision of rate for savings bank deposits.

The Bank's advances grew by 21.45% YOY, from 1,08,604 crore as on 30th June 2010 to 1,31,900 crore as on 30th June 2011 while investments rose to 75,307 crore from 57,540 crore over the same period, a growth of 30.88% YOY. The NII rose to 1,724 crore during Q1FY12 from 1,514 crore during Q1 FY11, a growth of 13.89% YOY.

•           Fee Income

Fee income registered a growth of 42% YOY, rising to ,057 crore during Q1FY12 compared to 743 crore in Q1FY11, with contributions from all the major businesses in the Bank. Fee income from Large and Mid Corporate Credit (including Infrastructure) grew 81% YOY, followed by that from Retail banking (42% YOY), Treasury and Debt Capital Markets (24% YOY), Agri & SME Banking (14% YOY), Business Banking (4% YOY), while fee income from Equity Capital Markets (including Trusteeship Services) declined by 19% YOY.

•           Trading Profits

The Bank generated 70 crore of trading profits during Q1 FY12, as compared to 196 crore during Q1FY11, a decline of 64.12% YOY. The share of trading profits to operating revenue was 2.43% in Q1 FY12, compared to 7.78% in Q1FY11.

•           NPAs and Restructured Loans

Net NPAs, as a proportion of net customer assets, were 0.31 % as on 30th June 2011 compared to 0.35% as on 30th June 2010 and 0.26% as on 31st March 2011. Gross NPAs as a proportion of gross customer assets stood at 1.06% as on 30th June 2011, compared to 1.13% as on 30th June 2010 and 1.01% as on 31st March 2011. The Bank had a provision coverage of 80.00% as on 30th June 2011 (as a proportion of Gross NPAs including prudential write-offs). The provision coverage (as a proportion of Gross NPAs) before accumulated write-offs was 90.38%.

During the quarter, the Bank added 296 crore to Gross NPAs. Recoveries and upgradations of 92 crore and write-offs of 230 crore during the quarter resulted in a closing position of 1,573 crore of Gross NPAs on 30th June 2011, higher than the position at the end of June 2010 by 232 crore.

The Bank restructured loans aggregating 107 crore during Q1FY12. The cumulative value of assets restructured till 30th June 2011, rose to 2,151 crore (1.44% of gross customer assets). 82% of these loans were restructured prior to Q1FY11 and were more than a year old.

The segment-wise break-up of restructured loans as on 30th June 2011 is as follows:

Large and Mid-Corporate Credit

76.24%

SME

11.80%

Agri

6.15%

Capital Markets

5.81%

The sector-wise breakup of restructured loans as on 30th June 2011 was as follows:

Shipping

20.95%

Textiles

19.82%

Petroleum

7.93%

Iron & Steel

6.78%

Agriculture

6.24%

Others

38.28%

• Investment Portfolio

The book value of the Bank's investment portfolio as on 30th June 2011 was 75,307 crore, of which, 48,311 crore related to government securities while 26,996 crore was invested in other securities such as corporate bonds, equities, preference shares, mutual funds etc. 88% of the government securities have been classified in the HTM category while over 99% of the Bonds & Debentures portfolio have been classified in the AFS category. The distribution of the investment portfolio in the three categories as well as the modified duration as on 30th June 2011 in each category was as follows:

Category

Percentage

Duration*

HFT

4.06%

1.47 years

AFS

33.48%

3.01 years

HTM

62.46%

5.31 years

* Excluding mutual funds and equity investment

Business Overview

•           Placement / Syndication

The Bank arranged debt aggregating 19,143 crore during Q1FY12. The Bank was assessed by Prime Database as the No.1 Debt Arranger for FY11 and also by Bloomberg for the quarter ended June 2011 & YTD 2011. The Bank was also recognised as the "Best Domestic Debt House - India; 2011" by Asia Money, "Best Debt House - India; 2011" by Euromoney and "Best Bond House - India; 2011" by Finance Asia

•           Retail Business

The number of Savings Bank accounts grew from 83.27 lacs as at the end of June 2010 to 99.02 lacs as at end-June 2011. Retail advances grew from 21,069 crore as at end-June 2010 to 27,022 crore as at the end of June 2011, a growth of 28.25% YOY. Retail Advances accounted for 20.49% of the total Advances of the Bank as at the end of June 2011. The Bank's International Debit Card issuance has risen to 105 lac debit cards as on 30th June 2011, as compared to 87 lac debit cards in force as on 30th June 2010. The Bank had over 6.48 lac credit cards in force and an installed base of over 1.87 lac Electronic Data Capture (EDC) machines as on 30th June 2011. The Bank offers personal investment products including life insurance products, general insurance products, online trading accounts and mutual funds of leading manufacturers as also wealth advisory services and Mohur - gold coins and bars - through select branches.

•           International Business

The Bank has six international offices - branches at Singapore, Hong Kong and Dubai (at the DIFC) and representative offices at Shanghai, Dubai and Abu Dhabi and a subsidiary at UK which focus on corporate lending, trade finance, syndication, investment banking, risk management and liability businesses. The total assets under overseas operations were USD 4.52 billion as on 30th June 2011.

•           Capital and Shareholders' Funds

The Shareholders' Funds of the Bank were 20,017 crore as on 30th June 2011, compared to 6,889 crore on the 30th June 2010, a growth of 18.52% YOY. The Capital Adequacy Ratio for the Bank was 12.53%, as on 30th June 2011, compared to 14.54% as on 30th June 2010. The Tier-I capital adequacy ratio was 9.36% as on 30th June 2011, compared to 10.32% as on 30th June 2010. The profit of Q1 for both financial years has not been reckoned for computation of Tier-I capital, as stipulated by Reserve Bank of India. If the net profit of 942.35 crores for Q1 this year is included, the total CAR and Tier-I CAR as on 30th June 2011 would have been 13.01% and 9.84% respectively.

•           Appointment of Additional Director

Prof. Samir Barua has been appointed as an Additional Independent Director with effect from 22nd July 2011. He has been on the faculty of Indian Institute of Management, Ahmedabad, for the past 30 years and having held various administrative positions, is currently, the Director of Indian Institute of Management, Ahmedabad. Prof. Barua brings considerable expertise in financial markets and risk management. He is an independent director on the board of corporates such as Bharat Petroleum Corporation Limited, Securities Trading Corporation of India Limited, Coal India Limited, Torrent Power Limited and IOT Infrastructure and Energy Services Limited.

•           Update on Proposed Acquisition of Enam's Demerged Businesses

The Bank has received an in-principle approval from the Reserve Bank of India (RBI) for acquiring certain demerged businesses from Enam. RBI had stipulated certain conditions, including a revised scheme of accounting and the eventual structure for the businesses proposed to be acquired. Upon examining the implications of these conditions, the Bank has sought certain modifications to the approval granted by RBI. Pending the receipt of the necessary approvals, no effect of the acquisition has been given to the financials for the quarter ended 30th June 2011.

A presentation for investors is being separately placed on the Bank's website: www.axisbank.com

For information, please contact Mr. Somnath Sengupta, Executive Director & Chief Financial Officer, somnath.sengupta@axisbank.com

 in crore

Financial Performance

Q1FY12

Q1FY11

%Growth

Net Profit

942.35

741.88

27.02

EPS Diluted ()

22.67

17.95

26.30

 

 

 

 

Net Interest Income

1,724.10

1,513.77

13.89

 

 

 

 

Other Income

1,167.87

1,000.78

16.70

- Fee Income

1,056.95

743.07

42.24

- Trading Income

70.23

195.74

(64.12)

- Miscellaneous Income

40.69

61.97

(34.34)

 

 

 

 

Operating Revenue

2,891.97

2,514.55

15.01

Core Operating Revenue*

2,821.74

2,318.81

21.69

Operating Expenses (incl. depreciation)

1,333.49

1,064.50

25.27

Operating Profit

1,558.48

1,450.05

7.48

Core Operating Profit**

1,488.25

1,254.31

18.65

* Core Operating Revenue = Operating Revenue - Trading Income

** Core Operating Profit = Operating Profit - Trading Income

 in crore

Condensed Unconsolidated Balance Sheet

As on 30th Jun'11

As on 30th Jun'10

 

 

 

CAPITAL AND LIABILITIES

 

 

Capital

411.88

407.44

Reserves & Surplus

19,604.65

16,481.58

Deposits

183,596.83

147,479.42

Borrowings

22,320.51

19,614.92

Other Liabilities and Provisions

7,207.19

5,475.64

Total

233,141.06

189,459.00

 

 

 

ASSETS

 

 

Cash and Balances with Reserve Bank of India and Balances with Banks and Money at Call and Short Notice

18,863.13

17,119.18

Investments

75,307.39

57,540.20

Advances

131,899.66

108,604.27

Fixed Assets

2,261.32

1,730.55

Other Assets

4,809.56

4,464.80

Total

233,141.06

189,459.00

 in crore

Business Performance

As on 30th Jun'11

As on 30th Jun'10

% Growth

Total Deposits

183,597

147,479

24.49

 

 

 

 

Demand Deposits

74,414

59,249

25.59

- Savings Bank Deposits

42,899

34,703

23.62

- Current Account Deposits

31,515

24,546

28.39

Demand Deposits as % of Total Deposits

40.53%

40.17%

 

 

 

 

 

Term Deposits

109,183

88,230

23.75

 

 

 

 

Demand Deposits on a Cumulative Daily Average Basis for the quarter

65,911

55,043

19.74

Demand Deposits as % Total Deposits (CDAB basis) for the quarter

36.83%

39.94%

 

 

 

 

 

Net Advances

131,900

108,604

21.45

- Large & Mid-Corporate

70,323

60,131

16.95

- SME

19,834

16,818

17.93

- Agriculture/Micro Finance

14,721

10,586

39.06

- Retail Advances*

27,022

21,069

28.25

 

 

 

 

Investments

75,307

57,540

30.88

 

 

 

 

Balance Sheet Size

233,141

189,459

23.06

 

 

 

 

Net NPA as % of Net Customer Assets

0.31%

0.35%

 

Gross NPA as % of Gross Customer Assets

1.06%

1.13%

 

 

 

 

 

Equity Capital

411.88

407.44

1.09

Shareholders' Funds

20,017

16,889

18.52

Capital Adequacy Ratio

12.53%

14.54%

 

- Tier I

9.36%

10.32%

 

- Tier II

3.17%

4.22%

 

* Retail Advances are defined as loans to individuals other than Agricultural Credit.