Axis Bank is expected to announce a 15.4% year-over-year (YOY) increase in net interest income (NII), reaching ₹11,957.4 crore in its second quarter earnings announcement today, October 25, according to a CNBC-TV18 Poll. The bank's profit after tax (PAT) is also anticipated to surge by 7.6% to ₹5,732.7 crore. However, Kotak Securities predicts a decline of 5 basis points quarter-on-quarter (QOQ) in the net interest margin (NIM).
Loan growth for the bank, primarily in high-yielding loans, is expected at 20% YOY and 3% QOQ. Kotak also forecasts a treasury loss in Q2 which could impact operating profit growth. Predicted slippages, led by the retail segment, are expected to remain stable sequentially, ranging between ₹3,500 crore and ₹4,200 crore. The gross non-performing assets (GNPA) and net non-performing assets (NNPA) ratios indicating asset quality are expected to stay stable sequentially.
On Monday, Axis Bank's shares settled 1.51% lower at ₹965.55 apiece, with a six-month gain of 10%. The bank's near-term growth outlook and NIM progress are key areas to monitor.
In comparison, ICICI Bank's Q2 fiscal 2024 saw a net income of INR102.61 billion ($1.2 billion), marking a 35.8% YoY increase and a near 1% NYSE share price rise. This was driven by a 23.8% YoY increase in NII to INR183.08 billion ($2.2 billion), a 14% rise in non-interest income to INR58.61 billion ($706 million), and growth in loans and deposits.
ICICI Bank's total advances and deposits grew 18.3% and 18.8% YoY to INR11,105.42 billion ($133.7 billion) and INR12,947.42 billion ($155.9 billion) respectively, driven by retail loan balances, business banking loans, and SME loans. However, the bank faced a 20.8% rise in operating expenses to INR98.55 billion ($1.2 billion) and a treasury loss of INR0.85 billion ($10 million). The net NPA ratio improved to 0.43%, with gross NPA additions at INR46.87 billion ($546 million) and gross NPA written-off at INR19.22 billion ($231 million).
ICICI held a total contingency provision of INR131 billion ($1.6 billion), reported a total capital adequacy of 17.59%, Tier-1 capital adequacy of 16.86%, and a net interest margin of 4.53%. Its fee income was INR52.04 billion ($627 million). On the other hand, Barclays (LON:BARC)' Q3 2023 net income was £1.27 billion ($1.61 billion).
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