India Earnings Season: Axis steals the thunder in Q1, will Q4 be pathetic again?

To be fair, credit growth has been exceptionally rosy for aggressive players and those with the capacity for raising more profitable RWA should in fact be put to task by the markets in this quarter from among the banks, we have alrdy traced DCB, ING and contrasted with Indusind a nd HDFC. Now we observe the biggies in action as ICICI Bank comes out with Q1 results and HDFC Bank’s score seems a tough enough ask to verify whether performance is intermnal to the company or a fabrication of circumstances for a nearly public sector monolith.

Axis in the mean time paid 200 bps higher on term deposits to shricnk the NIM to 3.28%. Themanagement feels it likely that they will manage NIMs between 3.25% to 3.5% On their overall loan book of $33 bln or Rs 1.32 Tln, the bank has earned Rs 1730 crs in net income or $432 mln. At a CASA of 40% deposits are up to Rs 1.84 tln or $46bln and CD Ratio thus just above 75% fairly safe for the overall book

NPAs were pretty big however at 1.06% showing improvement but no where near ideal, the bane of its public sector history with weak controls and may be even corruption as prevalent in the industry sector. At Basel I Cap Adequacy of 12.53% the bank is barely ewell priovided for the traditional model esp as its NPA folio despite 50% lower provisions of Rs 175 crores, is still a near $350 mln at Rs 1500 crores