Axis Bank Ltd Q4 FY22 Earnings Conference Call Insights

Key highlights from Axis Bank Ltd (AXISBANK) Q4 FY22 Earnings Concall

Q&A Highlights:

• Mahrukh Adajania from Edelweiss asked about the transfer of standard assets to ARC. Puneet Sharma CEO said AXISBANK has not transferred standard assets to ARC. There was only one transfer, which is an NPA of INR 215.78 crores, that was sold to an ARC in the quarter. The bank has an aggregate realization of INR63.4 crores against that sale.

• Rohan Mandora from Equirus enquired about the segments where the bank will look to grow faster. Puneet Sharma CEO replied that the focus segments as the bank looks to grow on the wholesale side is the midcorporate segment. AXISBANK has already delivered strong sequential quarter growth on the Commercial Banking segment.

• Rohan Mandora from Equirus asked how the bank is pacing the PSL. Amitabh Chaudhry MD replied that AXISBANK has met the PSL requirements for the second year in a row across all the categories. Obviously, whatever money was spent in buying certain certificates have obviously been taken through the P&L.

• Rohan Mandora from Equirus also asked about the total deposits in the Burgundy AUM. Puneet Sharma CEO answered that the bank doesn’t disclose that amount separately. The Burgundy AUM is disclosed on a consolidated basis.

• Adarsh from CLSA queried about the retail TD where the momentum has been too sluggish in last few quarters. Ravi Narayanan GE said that what the bank is trying to do is look at retail TD as a vector where it is trying to address constitution-based approach. Bank’s entire effort through the last couple of years has been to correct the approach towards the individual side.

• Kunal Shah from ICICI Securities asked about the reason for QonQ decline in the employee count. Amitabh Chaudhry MD answered that it shows the bank’s ability to be able to manage costs when it wants to.

• Kunal Shah from ICICI Securities enquired about the standard and the non-NPA provisioning declining. Puneet Sharma CEO said the bank has netted the provisions off against the investments and that has caused the reduction in both the SR figures as well as the standard asset provision number. So there is no utilization, it’s a simple markdown.

• Kunal Shah from ICICI Securities enquired about the notes to accounts, is the loans which are transferred on the corporate side, what is the nature of these loans. Puneet Sharma CEO replied they are standard assets that are transferred. Second, if the reference is to the INR5,068 crore number, it’s principally the syndication business. It’s loans that AXISBANK underwrites and then syndicate by maturation.

• Kunal Shah from ICICI Securities asked about the credit cost guidance for FY23, FY24. Puneet Sharma CEO replied that on the guidance, the bank doesn’t give specific guidance. The bank remains optimistic and are confident about the future.

• Jai Mundhra from B&K Securities asked about the economics of Airtel co-branded credit card tie up. Sanjeev Moghe EVP replied that AXISBANK is seeing a healthy traction, and it will continue to see gains going along.

• Jai Mundhra from B&K Securities queried about the gross slippages on corporate, retail and SME. Puneet Sharma CEO said the retail versus wholesale gross slippages would be 63% retail, 37% wholesale, which is wholesale plus CBG put together. Additionally, 54% of the gross slippage is attributable to linked accounts that was standard when classified as slippage plus other standard accounts that slipped and recovered in the same quarter.