MUMBAI, July 18 (Reuters) – Indian private lender Axis Bank (AXBK.NS), reported higher-than-expected profit for the first quarter on Saturday, as core interest income improved and provisions fell.
The country’s third-largest private lender by market capitalisation posted a standalone net profit of 71.14 billion Indian rupees ($738.89 million) for the three months ended June, compared with 58.06 billion rupees a year earlier. Analysts had expected a profit of 65.5 billion rupees, according to data compiled by LSEG.
The bank had taken a one-time charge on a part of its loan book in the year-ago quarter due to what it termed at the time as an “industry benchmarking” exercise on its credit overdraft facilities.
Indian banks have seen a pick-up in loan growth since April, with demand for personal credit and loans against gold rising. Small businesses have also stepped up borrowings, in part backed by government default guarantees made available against the backdrop of disruptions caused by the Iran war.
Axis Bank’s net interest income rose 8% to 146.46 billion rupees, aided by a 19% rise in domestic loans.
Deposits grew 6% during the quarter.
Net interest margin, a key measure of the bank’s profitability, fell to 3.46% compared to 3.62% a quarter ago.
Funds kept aside for potential bad loans and other losses fell 44% to 22.22 billion rupees.
The bank’s other income, which includes income from treasury, fell 7%, as volatile currency and bond markets led to a fall in income to 67.35 billion rupees.
The Mumbai-based lender’s asset quality remained stable with the gross non-performing asset ratio at 1.28% at the end of June, compared with 1.23% in the three months earlier.
($1 = 96.2800 Indian rupees)
Reporting by Gopika Gopakumar; Editing by Sam Holmes.
