Axis Bank Q2 results

Axis Bank’s Q2 Boom: 18% Profit Surge to ₹6,918 Crore—What It Means for Your Investments!

In a promising demonstration of resilience and growth, Axis Bank reported a standalone net profit increase of 18% year-on-year (YoY) for the second quarter of FY25, amounting to Rs 6,918 crore. This marks a significant rise from the profit after tax (PAT) of Rs 5,864 crore recorded in the same quarter last year. The bank’s robust performance can be attributed to a combination of strategic initiatives, increased Net Interest Income (NII), and an expansion of its branch network.

Revenue Growth

Axis Bank’s Net Interest Income (NII) grew by 9% YoY, reaching Rs 13,483 crore. This increase reflects the bank’s successful strategies in managing interest rates and its ability to grow its lending portfolio effectively. The Net Interest Margin (NIM) for Q2 FY25 stood at a healthy 3.99%, indicating effective utilization of its assets to generate income.

The bank’s operating profit also saw a significant boost, growing by 24% YoY and 6% quarter-on-quarter (QoQ) to Rs 10,712 crore. Notably, the core operating profit—calculated by excluding trading profits—increased by 10% YoY to Rs 9,601 crore, highlighting the bank’s strong operational efficiency.

Cost Management and Efficiency

Axis Bank effectively managed its operating costs, which grew at a moderated rate of 9% YoY in Q2 FY25, a decrease from the 11% YoY growth seen in Q1 FY25. This disciplined approach to cost control has contributed to the overall profitability, allowing net profit to grow by 15% on a QoQ basis in Q2 FY25.

Commenting on these results, MD & CEO Amitabh Chaudhry emphasized the balance Axis Bank has achieved between digital advancement and physical expansion, enhancing its service delivery and customer reach. The bank opened 150 new branches in the last three months, reinforcing its presence in both urban and rural markets.

Strategic Expansion and Regional Presence

Axis Bank has also strengthened its regional footprint by laying the foundation for a new corporate office in Kolkata, which will serve as a hub for operations in the Eastern region. This move is part of a broader strategy to enhance service delivery and operational efficiency across India.

The expansion of the private banking division, Burgundy Private, into 15 new cities has also been noteworthy, increasing its presence to 42 locations nationwide. This move allows Axis Bank to cater to the evolving needs of wealthy clients in India’s rapidly growing Tier-2 markets.

Non-Interest Income Performance

The bank’s non-interest income, which includes fees, trading, and miscellaneous income, experienced robust growth, rising 34% YoY to Rs 6,722 crore in Q2 FY25. Fee income alone grew by 11% YoY and 6% QoQ to reach Rs 5,508 crore, with retail fees constituting a significant portion—70%—of the total fee income. Retail cards and payments fees saw an increase of 10% YoY and 3% QoQ, underscoring the bank’s strong performance in the retail sector.

Additionally, trading income for the quarter was reported at Rs 1,111 crore, supplemented by miscellaneous income of Rs 103 crore.

Asset Quality

Axis Bank’s asset quality remained stable, with gross Non-Performing Assets (NPA) and net NPA levels reported at 1.44% and 0.34%, respectively, as of September 30, 2024. These figures reflect an improvement from 1.54% and 0.34% reported on June 30, 2024. Recoveries from written-off accounts totaled Rs 984 crore, while net slippages for the quarter, after adjustments for recoveries, were reported at Rs 1,390 crore.

The bank’s provision coverage ratio for gross NPAs stood at 77%, slightly down from 79% in the same period last year and 78% in the previous quarter, indicating a strong buffer against potential asset quality challenges.

Growth in Deposits and Advances

As of September 30, 2024, Axis Bank’s balance sheet grew by 12% YoY, amounting to Rs 15,05,658 crore. Total deposits increased by 14% YoY, with current account deposits growing by 8% YoY and savings account deposits by 2% YoY. Term deposits grew impressively by 21% YoY, showcasing the bank’s ability to attract and retain customer funds.

On the advances front, the bank reported an 11% YoY growth, reaching Rs 9,99,979 crore as of the same date. Retail loans surged by 15% YoY and 2% QoQ to Rs 5,98,715 crore, accounting for 60% of the net advances of the bank.

Conclusion

Axis Bank’s Q2 FY25 results reflect a strong performance driven by significant increases in net profit and revenue. Axis Bank Q2 results, The bank’s strategic initiatives in expanding its branch network and enhancing its service offerings, coupled with robust asset quality management, position it well for sustained growth in the competitive banking landscape. With a strong focus on both digital innovation and physical expansion, Axis Bank continues to adapt to the evolving needs of its customers, promising a bright future ahead.