Axis Bank eyes 30% retail assets by FY15
Mumbai: Private lender Axis Bank plans to increase the share of its retail lending from the present 26 percent of the total loan book to 30 percent by 2015, a top official said on Tuesday.
As of the September quarter, the third largest private lender saw its retail loan book jump by 5 percentage points from the year-ago period, Axis Bank Executive Director Somnath Sengupta told reporters in a post-earnings conference call.
On a year-on-year basis, the retail banking grew 43 percent as of the second quarter, while large and mid-corporate banking grew just 15 percent, he said.
"The focus on retail assets will continue to grow, and our target is to take it further to 30 percent by the end of FY15. It is a part of strategic intent to grow the retail book. We are expanding through home, auto and personal loans. We are also selling credit cards to our existing customers."
On Monday, the bank reported better-than-expected Q2 numbers logging in 22.08 percent rise in net profit to Rs 1,123 crore.
Terming the quarterly numbers as satisfactory despite a challenging environment, Sengupta said retail advances and lower expenses helped the bank post good numbers.
Total income rose 27 percent to Rs 8,280.29 crore in the July-September quarter. NII rose to Rs 2,327 crore from Rs 2,007 crore, while other income grew 29 percent to Rs 1,593 crore, driven by growth in fee income which stood at Rs 1,343 crore, a growth of 20 percent.
The bank saw its trading income rise to Rs 207 crore during the quarter, he said.
The bank improved its net interest margin to 3.46 percent in the reporting period from 3.37 percent at the end of the first quarter.
Sengupta further said the bank could maintain asset quality as its gross NPAs and net NPAs stood barely unchanged at 1.10 percent and 0.33 percent, respectively as against 1.08 percent and 0.34 percent as of September 2011.
The bank held a provision coverage of 80 percent as a proportion of gross NPAs, including prudential write-offs.
The bank had made an additional provision of Rs 115 crore in the quarter, he said, adding it has provided for the exposure to the troubled Hyderabad-based Deccan Chronicle Group, which has become a bad asset now.
However, Sengupta did not reveal whether the bank has made full provisions for the Deccan loans and also the exact amount of the exposure. However, it has been learnt Axis Bank has exposure of over Rs 400 crore to the diversified company.
Asked about the bank's exposure to the state-run power distribution companies (discoms) whose Rs 1.9 trillion of debt was recast last month, he said it was "limited" but refused to quantify it. Similar was his response when asked about the textile sector, whose Rs 16,000 crore of debt is being recast with government intervention now.
Sengupta also refused to disclose the status of other two default accounts-- SevenHills Hospital (exposure at around Rs 463 crore) and Icomm Tele (around Rs 220 crore).
About fresh slippages during Q2, he said the quarter saw a gross slippage of Rs 628 crore primarily due to a large corporate account. During the quarter, the bank saw Rs 99 crore incremental slippages net of restructuring and upgrades.