Axis Bank reported a 224% jump in its net profit to Rs 3,614 crore for the fiscal third quarter ended December, helped by a robust growth in government business, refinance opportunities and lower provisioning. 

Provisions (excluding provision for tax) declined 64% to Rs 1,335 crore in the December quarter. 

The bank's total income during the October-December period of 2021 rose 15% to Rs 21,101 crore from Rs 18,355 crore a year ago. 

With the government beginning to spend on infrastructure projects, many of the banks are reporting a spurt in corporate advances in the fiscal third quarter. 

“The bank is getting business from both the Central and the state governments and is exploring all opportunities that are coming its way to expand its balance sheet,” said Axis Bank chief financial officer Puneet Sharma. 

Axis Bank’s net interest income (NII) rose 17% to Rs 8,653 crore and its net interest margin (NIM) stood at 3.53%, up by 14 basis points (bps) over the previous quarter. The other income, which includes fee, trading profit and miscellaneous income, grew 31% year-on-year to Rs 3,840 crore in the December quarter. 

Asset quality also improved, helping the bank to provision less and report higher profits. The bank’s gross non-performing assets (NPA) ratio stood at 3.17% in the quarter ended December 2021, down 36 bps sequentially and 27 bps YoY. The net NPA ration was at 0.91% as against 1.08% a quarter ago and 0.74% a year ago. 

The bank’s gross slippages moderated at Rs 4,147 crore (2.6% run-rate) as compared to Rs 5,464 crore during Q2 and Rs 7,993 crore in Q3FY21. Slippages from the loan book were at Rs 3,332 crore and that from investment exposures at Rs 815 crore. Recoveries and upgrades from non-performing assets (NPAs) during the quarter were Rs 3,288 crore, while write-offs were at Rs1,707 crore. 

Axis Bank chief executive Amitabh Chaudhry said that over the past few years, the bank has created right provisions, taken upfront Covid-related hit by not giving too much of ECLGS loans or even restructuring. “This is reflected in improvement in the asset quality," he added. 

ECLGS, which was launched on 20 May 2020, provides 100% guarantee coverage to select borrowers. Originally devised for small business borrowers with total fund-based credit outstanding of up to Rs 25 crore, it now includes other segments as well. 

Axis Bank’s advances grew 17% over the previous year to Rs 6.64 trillion as on 31 December. Retail loans grew 18% YoY to Rs 3.67 trillion and accounted for 55% of the net advances of the bank. The share of secured retail loans was at 80%, with home loans comprising 37% of the retail book. The bank’s corporate loan book grew 13% over the previous year to Rs 2,29.462 crore. Eighty-seven per cent of the corporate book is now rated A- and above, with 92% of incremental sanctions in Q3FY22 being to corporates rated A- and above. 

The SME loan book grew 20% over the previous year and 9% sequentially to Rs 67,909 crore. According to a note by ICICI Securities, 96% of Axis Bank’s SME book is secured with predominantly working capital financing, and is well diversified across geographies and sectors.