Annual Report Highlights FY12-13 - Axis Bank

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Bank grew its retail operations this year with addition of 325 branches and 1321 ATMs.  Over the last 5 years, the Savings deposits grew by healthy 26% and Current accounts by around 19%.  Retail advances grew by 31% against total advances growth of 26%.  Bank is concentrating now on retail which is good.  Return on Equity stood at 20.5% and Return on assets at 1.7%.  Over the last year, PAT was up 22%.  Net Interest Income up 20.5%.  Fees and other Income grew by around 14%.  Deposits went up by 22% and advances by 16%.  Total numbers of branches are 1947 and ATMs stand at 11245. Bank had Capital Adequacy Ratio of  17% and Tier-1 CAR of 12.23%.

Over the last year CASA deposits grew by more than 21%.  Retail advances grew by 43% whereas non retail grew by meager 8%.  Given the business environment, non-retail has been slow.  Corporate accounts advances increased by7.89% and SME loans increased by 25.7%.   Agri lending went down  by 14%.  Most of the retail loans (85%) are secured.  Provisions and write off went up by 53% suggesting growing NPA concerns. Net Interest Margins went lower from 3.59 to 3.53%.  Gross NPAs grew from 0.94 to 1.06%.  Net NPAs grew from 0.25 to 0.32%.  Provision coverage is at 79%.    Total restructured assets stood at 4701 Cr which is 2.38% of gross advances and very high.   They have provided only 103 cr which is at 2% as per RBIs guidance.

CASA Deposits constituted 44% of the total deposits compared to 41.5% last year which is very good.  Average cost of funds (deposits and CASA) increased from 6.28 to 6.55% which has led to the reduction in NIM.  Cost of deposits increased from 6.47 to 6.73%.  Yields on earning assets grew from 9.66 to 9.75%. Bank’s NRI deposits have increased  from 8624 to 13104 cr.

Other Income forms about 40% of the total operating revenue of the bank. Fee income forms 34% of the operating revenue and the earning is from diverse set of services offered by the bank.  Loan recoveries has been down this year which has reduced the miscellaneous income.  Cost to income ratio came down to 42.63% from 44.70% last year which is due to improvement in operating efficiencies. During this year, the bank restructured around 2110 Crores.  Off the banks total assets overseas assets constitute about 11%.  Bank raised capital through QIP at Rs1390 which was successful.

Within the retail loans 65% of the loans are for home loans and 7% for loans against property.  14% towards auto and 9% towards personal loans and credit cards.  Retail market downturn could impact the retail portfolio.