India's Axis Bank beats Q4 profit estimates on strong loan, NII growth

By Dimpal Gulwani and Siddhi Nayak

BENGALURU (Reuters) -India's Axis Bank reported fourth-quarter profit above estimates on Wednesday, helped by strong loan growth and higher lending income.

The private lender reported a standalone net profit - which excludes its subsidiaries - of 71.30 billion rupees ($856.3 million) for the quarter ended March 31, compared with analysts' estimates of 55.40 billion rupees, as per LSEG data.

Axis Bank had reported a loss of 57.28 billion rupees in the year-ago period, weighed down by a one-time expense incurred due to its $1.41 billion Citi deal.

Its net interest income - the difference between interest earned and paid - rose 11.5% to 130.89 billion rupees.

The bank's net loans grew 14%, while total deposits rose 13%.

Indian banks have continued to focus on strengthening deposit growth amid rising costs due to tighter liquidity conditions, and despite higher consumer spending that kept loan growth afloat in the face of high interest rates.

Deposits should continue to grow despite tight liquidity conditions, the bank said in a post-earnings call.

Net interest margin - the difference between interest obtained on loans and paid on deposits - shrunk to 4.06% from 4.22% a year earlier but rose slightly from 4.01% in the previous quarter.

The bank's provisions, or money set aside for bad loans, nearly quadrupled to 11.85 billion rupees year-on-year.

The gross non-performing assets ratio was at 1.43% at the end of March, compared with 1.58% three months earlier.

The lender should be able to continue resilience in its information technology systems and has built infrastructure to deal with higher volumes of digital transactions, said Subrat Mohanty, executive director - banking operations and transformation at Axis.

Mohanty's comments came hours after India's central bank barred Kotak Mahindra Bank from taking on new customers via its online and mobile banking channels, and from issuing new credit cards, due to information technology-related deficiencies.

($1 = 83.2690 Indian rupees)

(Reporting by Dimpal Gulwani in Bengaluru; Editing by Varun H K)