Axis Bank Q3 Net Up 66%

The third-biggest private sector bank, Axis Bank has announced the results for the three months period ended on December 31, 2007.

For the said period, the bank has recorded a 66 percent jump in its net profit on the back of higher interest income and better net interest margin.

The bank posted a net profit of Rs 306.8 crore as compared to Rs 184.6 crore during the corresponding period of the year 2006.

Mr. P.J. Nayak, Chairman and Chief Executive Officer, Axis Bank said, “There has been a strong growth in our current account and savings account (CASA) portfolio and this has helped us in reducing the cost of funds. The growth in fee-based income and trading profit has also boosted the profit.”

The net interest income rose by 91 per cent at Rs 747.34 crore for the quarter as compared to Rs 391.03 crore in the corresponding quarter of previous year.

In its net interest income, the bank has recorded better-than-expected increase of 91% at Rs 747.34 crore as compared to Rs 391.03 crore in the corresponding quarter of previous year.

Mr. Nayak said that the overall credit of the recent increase in the bank’s net interest income goes to the rise in net interest margin, lower cost of funds and growth in net advances.

The bank’s net interest margin stands at 3.91%. The bank projects its NIM to develop once its pipeline of corporate advances translates into loan assets.

The average cost of funds stood at 5.72%. The current accounts arose 81% at Rs 15,264 crore, whereas the savings bank account grew by 51 per cent at Rs 15,768 crore.

The bank’s other income sprang up 74% at Rs 487.90 crore. Fee-based income increased by 81 per cent at Rs 348.41 crore and trading income went up at Rs 131.01 crore (Rs 79.28 crore).

Mr. Vishal Goyal, an analyst with Edelweiss Capital Ltd said, “Profit growth was mainly on account of sharp improvement in margins and strong treasury income.”

The net non-performing assets remained down at 0.42%, and the capital adequacy ratio (CAR) is at 16.88 per cent (11.83 per cent).

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