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regular-article-logo Friday, 17 January 2025

Axis Bank Q3 net profit up 4 per cent, cautions on retail asset quality issues

Executives at the country’s third largest private sector lender said the bank sees a degree of indebtedness in certain segments of the borrowers, which led to taking a deliberate call on slowing loan growth to 9 per cent in the October-December period

PTI Published 17.01.25, 11:17 AM
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Axis Bank reported a 4 per cent growth in its December quarter net profit at 6,304 crore, impacted by asset quality pressures from the retail segment.

Executives at the country’s third largest private sector lender said the bank sees a degree of indebtedness in certain segments of the borrowers, which led to taking a deliberate call on slowing loan growth to 9 per cent in the October-December period.

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The bank, however, does not have any clarity on how long the ongoing challenges will last, an executive said, adding that the tepid GDP growth is among the factors in the macro environment having a bearing on repayments.

The core net interest income grew by 9 per cent to 13,483 crore and the net interest margin declined by 8
basis points on year to 3.93 per cent.

Its gross slippages came at 5,432 crore, of which 4,923 crore came from the retail segments including unsecured lending and agri loans.

Amitabh Chaudhry, the managing director and chief executive of the lender, said retail asset quality is among the three focus areas for the bank along with deposit quality and costs in the current cycle and exuded confidence that things will “stabilise” over the next few quarters.

The bank, which is first among the major lenders to disclose the December performance, said retail assets grew 11 per cent and home loans, the mainstay, grew by only 3 per cent.

Among the unsecured loans, personal loans and credit card segment assets grew 17 per cent and 8 per cent, respectively, and executives explained that these growth rates are calls taken after deliberation.

The corporate advances grew just by 3 per cent, while those to small and medium enterprises were up 15 per cent.

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