- 17 Jan 2025
- ICICI Securities
AXIS BANK REPORTED SUBDUED PERFORMANCE IN Q3FY25 WITH ELEVATED DELINQUENCIES
News: Axis bank reported subdued performance in Q3FY25 with elevated delinquencies impacting growth and earnings. Advances grew 8.8% YoY (1.5% QoQ) to ₹10,14,564 crores, underperforming industry growth, with retail loans growing at 11% YoY (earlier 14% YoY), SME at 14%YoY (earlier 15% YoY) and corporate loans stable at 3%. Deposit accretion was at ~9.1% YoY (1% QoQ) to ₹10,95,883 crores, supported by term deposit growth of 14% YoY (3% QoQ). NII grew by 9% YoY (1% QoQ) to ₹13,606 crore, while NIMs compressed by 6 bps QoQ to 3.93%. Other income grew 7.5% YoY but declined by 11.2% amid lower disbursement. Opex declined 5% QoQ due to reduction in employee cost. Provisions continued to remain elevated at ₹2,204 crores, impacting earnings momentum. PAT came in at ₹6,304 crore, registering a 4% YoY rise but a 9% QoQ decline, with ROA at 1.64%. GNPA stood at 1.46%, marginally up from 1.44% QoQ.
Views: Calibration in growth amid delinquencies in unsecured retail segment impacted growth as well as earnings. Continued pain in personal loans & credit cards along with seasonal slippage from agri segment kept overall delinquencies elevated. No clear visibility on turning of the asset quality cycle. However, recent decline in valuation seems to factor near term concerns.
Impact: Neutral