{"id":157981,"date":"2024-01-24T06:25:59","date_gmt":"2024-01-24T11:25:59","guid":{"rendered":"https:\/\/44.250.171.167\/?p=157981"},"modified":"2024-01-24T06:26:01","modified_gmt":"2024-01-24T11:26:01","slug":"axis-bank-ltd-q3-fy24-earnings-conference-call-insights","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/axis-bank-ltd-q3-fy24-earnings-conference-call-insights\/","title":{"rendered":"Axis Bank Ltd Q3 FY24 Earnings Conference Call Insights"},"content":{"rendered":"<p><strong>Key highlights from Axis Bank Ltd (AXISBANK) Q3 FY24 Earnings Concall<\/strong><\/p>\n<ul>\n<li><strong>GPS Strategy Performance<\/strong>\n<ul>\n<li>Bank delivered over 18% ROE for last 6 quarters while maintaining better credit profile compared to past.<\/li>\n<li>Organically accreted 39 bps of CET1 capital in 9 months FY24.<\/li>\n<li>Focused on 3 areas &#8211; embedding performance culture, strengthening core and building for future.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Loan and Deposit Growth<\/strong>\n<ul>\n<li>All 3 lending segments saw strong sequential growth &#8211; retail 5% QoQ, SME 4% QoQ and corporate 3% QoQ.<\/li>\n<li>Improved quality of deposit franchise; retail term deposits at 12 quarter high growth of 17% YoY and 2% QoQ.<\/li>\n<li>100 new branches added in Q3, taking overall additions to 349 in 9 months FY24 amongst highest in industry.<\/li>\n<li>Loans grew 23% YoY adjusting for IBPC sales; deposits up 18% YoY.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Corporate Banking<\/strong>\n<ul>\n<li>Scaled up corporate-focused digital platform NEO which is seeing strong adoption.<\/li>\n<li>APIs driving growth in corporate onboarding, transactions and throughput.<\/li>\n<li>Rolling out NEO for large corporates to all new customers and beta testing with existing clients.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Retail Deposit Franchise<\/strong>\n<ul>\n<li>Focusing on transforming employee deposit mobilization capabilities through two initiatives &#8211; Siddhi and Project Triumph.<\/li>\n<li>Enabling all businesses to serve customers in real-time including video KYC and &#8216;Bring Your Own Device&#8217;.<\/li>\n<li>Low-cost CASA share at 42% among best in industry and grown at 14% CAGR over 3 years.<\/li>\n<li>Bulk deposit rates steadily inching up through the quarter, driven by tight system liquidity and high overnight rates.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Digital Banking Progress<\/strong>\n<ul>\n<li>48% YoY growth in deposits and 86% in loans on digital banking platform.<\/li>\n<li>Launched new digital products like Amaze savings account, Gift City account for NRIs etc.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Bharat Banking<\/strong>\n<ul>\n<li>Q3 FY24 disbursements up 46% YoY in Bharat banking segments.<\/li>\n<li>Rural advances up 34% YoY; deposits from Bharat branches up 11% aiding PSL and profitability.<\/li>\n<li>Expanded multi-product distribution to 2,420 branches plus CSC and partners.<\/li>\n<li>Building end-to-end omnichannel model on Salesforce to scale sustainably over next 3 years.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Citibank Integration<\/strong>\n<ul>\n<li>Integration progressing as per plan; portfolio metrics in line with estimates.<\/li>\n<li>Deposits stable; improved cross-sell into wealth, insurance and retail assets.<\/li>\n<li>70 synergy initiatives across cross-sell, productivity and costs on track.<\/li>\n<li>Expect to complete data migration and system integration by H1 FY25.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Operating Performance and Asset Quality<\/strong>\n<ul>\n<li>Consolidated ROA at 1.84%; ROE at 18.61%.<\/li>\n<li>NIM at 4.01%; core operating profit grew 1% QoQ.<\/li>\n<li>Fees grew 29% YoY, 4% QoQ; granular fees 93% of total.<\/li>\n<li>PAT at INR 6,071 cr, up 4% QoQ.<\/li>\n<li>GNPA ratio declined 80 bps YoY, 15 bps QoQ to 1.58%.<\/li>\n<li>Net NPA declined 11 bps YoY to 0.36%.<\/li>\n<li>Balance sheet mix improved &#8211; loans &amp; investments at 89% of assets.<\/li>\n<li>INR loans now 95.8% of advances vs 93.3% YoY.<\/li>\n<li>Retail and SME loans now 69% of book vs 65.4% YoY.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Fee Income Growth<\/strong>\n<ul>\n<li>Total retail fees up 36% YoY, 6% QoQ; fees on retail loans grew 26% YoY, 7% QoQ.<\/li>\n<li>Retail card fees grew 58% YoY; commercial card fees up 35% YoY.<\/li>\n<li>Fees from third-party products up 42% YoY; commercial banking fees up 13% YoY, 6% QoQ.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Deposit Growth Constraint<\/strong>\n<ul>\n<li>Deposit growth will constrain overall loan growth in short to medium term.<\/li>\n<li>Tight liquidity trends expected to continue; RBI intervention unlikely soon.<\/li>\n<li>Gained deposit market share through initiatives like Siddhi, partnerships, tech.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Capital Adequacy<\/strong>\n<ul>\n<li>Current level of 13.7% CET1 deemed adequate.<\/li>\n<li>Sufficient cushion above regulatory and domestic AAA protection capital.<\/li>\n<li>Capital consumption for growth limited given ~13% credit growth outlook.<\/li>\n<li>39 bps of CET1 organically accreted in 9m FY24 and expect to continue accreting capital organically.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Outlook<\/strong>\n<ul>\n<li>Not in the camp expecting rate cuts any time soon.<\/li>\n<li>Expect liquidity tightness and high rates to continue for most of FY25.<\/li>\n<li>Deposit growth constraint and high rates to prevail.<\/li>\n<li>Guidance of 400-600 bps over industry growth maintained.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Liquidity Impact Concerns<\/strong>\n<ul>\n<li>Not taking overnight rate tightness lightly.<\/li>\n<li>However no major asset quality concerns based on monitoring currently.<\/li>\n<li>Won&#8217;t compromise loan growth severely due to liquidity situation<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Key highlights from Axis Bank Ltd (AXISBANK) Q3 FY24 Earnings Concall GPS Strategy Performance Bank delivered over 18% ROE for last 6 quarters while maintaining better credit profile compared to past. Organically accreted 39 bps of CET1 capital in 9 months FY24. Focused on 3 areas &#8211; embedding performance culture, strengthening core and building for [&hellip;]<\/p>\n","protected":false},"author":1767,"featured_media":154818,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9825,392,1],"tags":[151,10169,1792],"class_list":["post-157981","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-earnings-call-highlights","category-earnings","category-finance-stocks","tag-banking","tag-earnings","tag-financial-services"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":160546,"url":"https:\/\/alphastreet.com\/india\/axis-bank-ltd-q4-fy24-earnings-conference-call-insights\/","url_meta":{"origin":157981,"position":0},"title":"Axis Bank Ltd Q4 FY24 Earnings Conference Call Insights","author":"Praveen","date":"April 25, 2024","format":false,"excerpt":"Key highlights from Axis Bank Ltd (AXISBANK) Q4 FY24 Earnings Concall Deposit Franchise Strengthening Focused on improving deposit quality and strength over the past couple of years. 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