Axis Bank posts 89 percent growth in net profit in Q1 of FY09 despite higher provisions
India's Axis Bank (formerly UTI Bank) beat market forecasts by announcing 89 percent rise in the fiscal quarter ended June 30, 2008 (Q1 of FY09) despite making higher provisions.
HDFC Bank to acquire Centurion Bank in $2.4 billion share-swap dealThe net profit of the bank for the first quarter of FY09 was Rs.330.14 crore, a growth of 88.67 percent over the net profit of Rs.174.98 crore posted during the first quarter of the previous year.
The bank also said that net interest income rose 92.55 percent (year on year or YoY basis) to Rs.810.46 crore, up from Rs.420.91 crore in the first quarter of the previous year.
The quarterly earnings per share or EPS (diluted) stood at Rs.9.03, which was 51 percent higher than the EPS of Rs.6.00 in the first quarter of the previous year.
"This growth in earnings has been possible because of the rapid expansion in advances. Net advances have grown by 48 percent YoY. Further, the bank's balance sheet size has grown by 44 percent YoY to Rs.1,13,660.04 crore as at end June'08 from Rs.79,109.04 crore as at end June'07," the bank said in a statement.
"The net advances of the bank grew to Rs.61,160 crore as at end June'08 from Rs.41,285 crore as at end June'07, a growth of 48 percent YoY, while investments rose to Rs.35,718 crore as at end June'08 from Rs.26,656 crore a year earlier, a growth of 34 percent YoY," the bank said.
The total business of the bank grew from Rs.79,109 crore to Rs.1,13,660 crore during the quarter under review (YoY growth of 44 percent).
The bank also posted an increase in number of retail customers. While the number of Savings Bank accounts grew from 5.049 million as at end June'07 to 6.523 million as at end June'08 (a growth of 29 percent YoY), retail advances grew 52 percent YoY from Rs.9661 crore at at end June'07 to Rs.14638 crore as at end June'08.
However, the bank has made a total provisioning of Rs.296.73 crore, far higher than the Rs.100.91 crore provisioning made in the corresponding quarter in the previous year, the bank said.
The bank had to set off Rs.225.20 crore for the depreciation of its investment portfolio on account of weakening financial markets, it said.
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