Lower provisions help Axis Bank to deliver healthy Q2FY22 Numbers | Axis Bank Q2 FY22 Result Analysis

2 min read

Business Highlights:

Bank opened 2.3 million new liabilities accounts in Q2, highest ever in a quarter.

Retail disbursements were up 54% on both YOY and QOQ basis.

Bank added 5.5 lakh credit cards in this quarter, a growth of 132% QOQ.

Bank become First Private Sector Bank to do a Secured Overnight Financing Rate (SOFR) linked trade credit transaction.

Bank Saw a sequential decline in retail slippages by 23%, resulting in lower provisions in credit costs.

Net slippage trend is lower with better recoveries across all segments.

Retail net slippages declined 81% QOQ. Restructuring at 0.64% of gross customer asset, is lower than larger private banking peers. 93% of retail restructuring is secured.

Fee income growth was 17% YOY and 21% QOQ remains healthy.

Combined first half PAT of domestic subsidiaries stood at Rs.513 crores, up 61% YOY.

Q2 average SA balances grew 23% YOY and 5% QOQ, while the average CA balances were up 18% YOY and 3% QOQ.

The rigor and rhythm across distribution channels and key projects – Triumph and Aarambh – now show up in new to bank (NTB) performance. 71% YOY and 58% QOQ growth in new retail savings customers. 1.2 lakh SA accounts opened via VCIP in Q2FY22. 36% YOY and 58% QOQ growth in new current account customers.

 Burgundy Private now manages nearly 2,790 HNI families, up from 1,225 families last year. Te total AUM here is in excess of Rs.75,950 crores, up from Rs.34,591 crores last year.

Asha Loans portfolio (Affordable Home Loans) crossed Rs. 10,000 crores in the quarter.

The passenger car sales industry de-grew by around 40% YoY while we grew by 37% YOY in the month of Sep’21.

Credit Cards:

The Axis – Flipkart cobranded Card saw highest ever monthly acquisitions through Flipkart platform in Sep’21.

The cards book was up 11% QoQ.

Over 25% of cards sourced in Q2FY22 were through KnownTo-Bank channel as compared to 21% in FY21.

Bank also have few large partnerships in the pipeline that will add to the momentum in the upcoming quarters.

Bharat Bank progress:

Bharat focused 2,065 branches saw 45% growth in disbursements in Q2FY22. The rural deposits also grew at 19% over previous year.

‘Bharat’ is the big opportunity of this decade as the farm sector reforms, infrastructure investments and digital inclusion story plays out in rural India.

Whole Sale Banking:

Mid corporate and commercial banking business grew 32% and 18% on YOY basis. They were up 10% and 7% on QOQ basis respectively.

Current Account deposits from the commercial banking segment grew 10% YOY, with 50% growth in average balances per new to Bank (NTB) customer accounts, reflecting the quality of strong relationship led franchise we are building.

Digital Banking:

Bank is investing in Project ‘Neo’ to build a world class Digital Corporate Bank.

Number of customers acquired for the digital Buy Now Pay later product were up 14x QOQ.

VKYC insta savings account product crossed Rs. 1,000 crores in SA balances in less than a year of launch.

WhatsApp banking,  has~ 1.9 million customers within nine months of launch.

About ~85% of customer service requests in branches are now digitally available and served through a proprietary cloud-based system

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