Questions across 5 calls

Puneet Sharma

Firm not listed in source transcripts

Axis Bank Limited

Axis Bank Limited CC-Mar25.pdf · 2025-04-25

Chintan, thank you for your question. Let me first start with your question on retention of the MEB growth into the subsequent quarter. I said this earlier as part of my opening comments and I will reiterate, we manage and track our performance on a quarterly average balance basis . Right through FY '25, our quarterly average balance numbers on a year-on-year basis has tracked our MEB balance growth. We have sequentially been a business that has had sequentially strong inflows in quarter 4, that trend has played through in the current quarter . We do not offer comment on how much of that money stays retained, you will see that visible in our quarter one reporting number as we stand, but I think two points for your consideration, we are very focused on QAB, that's how we manage our balance sheet. We are looking to drive up growth in deposits, that's visible through the deposit growth we are seeing in quar ter four. You will have to wait for us to report Q1 for you to get a colour of what was retained and what was not retained in quarter one of the current period. To your other question on rate transmission across our products, the way I would look to respond to that question to you would be - we manage our balance sheet on a duration basis, so please think of duration of our balance sheet as the key driver of rate transmission and rate impact . We have a tightly matched duration on assets and liabilities , and therefore , if you look at how the Bank performed through FY '23 and FY '24, we managed the up cycles and down cycles relatively well. On rate transmission across assets, we as a bank are policy led . We transmit rate increases or decreases in the quarter in which the policy rate changes and that policy will be effective both ways, on up cycle and down cycle. On liability repricing, you've seen some action across market participants including us . We've all done a savings account rate cut. There has also been a moderation on retail term deposit rates and those should be an offset to asset repricing as we see the repo cuts being passed through to customers.

So investments on our bank balance sheet are largely fixed rate. So effectively, if you look at the largest component of investments on a bank's balance sheet, they will be government securities, they are fixed rate instruments , and obviously, when rates tend to decline, you will have MTM gains like you had MTM losses, but they don't flow through the margin line as such. If you want a break up of our portfolio, roughly a dominant part of our portfolio which is 66% of our portfolio is held to maturity, and that should give you a colour on how the fixed rate book will behave. Borrowing should typically follow the same route as….

Axis Bank Limited CC-Dec24.pdf · 2025-01-16

Chintan, thank you for your question. Let me take the policies question and then I will request my colleagues to answer the deposit question. On the policy question, we provide 100% on day 91 on unsecured exposure whether triggered or linked. At least our understanding of the market is not everyone provides 100% for retail unsecured loans on the day the asset slips to NPA. So therefore, we are more prudent than some of our peer banks. Second is our policies impact some of our reported numbers more on account of prudence as we do rule-based write-off on our retail and SME portfolio. And therefore, the net slippage number gets accentuated in our case. Because if an asset is not written off and sits in GNPA stock, any recovery from that reduces your net slippage number for the quarter. For us, that recovery only gives us benefits in the net credit cost line. Therefore, that's the reason we chose to call this out because in the first year of start of a cycle, which is either normalization or credit cost, depending on what view participants in the call may have on where we are, our view is normalization. It's not a credit cycle yet. In the initial quarters, we will end up bearing more credit costs than banks that have a differential policy. I hope that gives you a fair flavor of why we call that out and why we think we are more prudent than the street.

Thanks, Abhishek. I think as we have indicated and you see in our performance, we have calibrated, so LDR is not the sole variable. There are multiple ways to manage the balance sheet. We have calibrated our balance sheet in a manner we believe satisfies the concern of the regulator. And at the current moment, we do not see a requirement extraneously put on us to moderate our LDR ratios. So, we will remain comfortable operating at that range. You would have seen the same range of LDR in Quarter 3 of last year, and you have seen the same numbers through the running five quarters of our performance.

Axis Bank Limited CC-Sep24.pdf · 2024-10-17

Mahrukh, thank you for your questions, and I'll clarify on the data points that you raised. Last quarter, we had interest on income tax refund, which was recorded in the net interest income line, that was Rs 220 crores -odd. In the current quarter, we have favorable orders from the ITAT, for which, we have been able to reverse tax provisions created in previous financial years. We received favourable orders for six financial years/assessment years. And the aggregated amount of tax provision reversed, and this reversal is sitting in the provision for tax. So below the PBT line, that amount is Rs 550 crores.

Nothing meaningful to speak of. This is a provisional reversal number.

Axis Bank Limited CC-Dec23.pdf · 2024-01-23

Chintan, we will anyway be publishing that number as part of our Basel disclosures. You should see it on our website at some point in time later in the evening, please.

Mahrukh, thank you for the question. I think the direct pointed answer to your question is if you look at slide eight of our investor presentation, you will see deposit growth presented on a QAB basis. And you will see that the QAB basis deposit growth tracks MEB basis very closely, which will indicate to you that balances have grown through the quarter rather than at period end.

Axis Bank Limited CC-Jan26.pdf ·

Saloni, thank you for your question. I think I request you to Slide 44 and Slide 45 of our investor presentation. While I will specifically answer your question on the increase in technical slippages, I think it's important to look at a few set of numbers before that. If you look at our net credit cost reported for Q1FY26, we were 1.38%. We are roughly half that net credit cost at Q3 FY26 at 0.76%. So, when we indicated that asset quality was stabilizing and is on an improving trend, that's clearly visible from the net credit cost number between Q1FY26 and Q3FY26. If I request you to look at Slide 45, which covers the details of the technical impact, the principal reason technical impact has increased sequentially is Q3FY26 and Q2FY26 are not apples -to-apples comparable. We have agri -slippages seasonality for the banking industry as a whole in Q1FY26 and Q3FY26. So, an appropriate comparison for Quarterly purposes would be Q1 FY26 versus Q3FY26. And if you look at the net slippages in Q1, we were INR 1,861 crores. We are INR 450 crores in that number with respect to Q3FY26 today. So, again, the number has declined. To your specific question that could this number have been better and will we work hard towards ensuring that this number continues to trend down, the answer is yes. You have seen healthy improvements and recoveries across the portfolio, and you should continue to see that trend play through in the subsequent Quarter.

Thank you for that question. I think, what I would actually like to point out is on the retail loan side, it's important loan book growth lags disbursement growth. So, I would like to give you some statistics around disbursement growth Q-o-Q, which would give you some comfort. Our retail disbursements on a Y-o-Y basis have grown by 20%, and on a Q-o-Q basis have grown by 12%. Since you specifically asked around the home loan portfolio, our home loan disbursements have grown 30% Y-o-Y and 16% Q-o-Q. So, what's really happened is as we were recalibrating our loan book, we had focused on higher RAROC products, and consequently there is a loan rundown, which will now on a go -forward basis start being recompensed by disbursement growth translating into loan growth. So, I would request you to focus on the lead indicator, the lead indicator being disbursements and specifically for home loans, 30% Y-o-Y growth in home loan disbursements and 16% Q-o-Q loan growth on home loans. To the first part of your question, which is wholesale, I think we found adequate opportunities to lend to the corporate sector on a relationship -led basis, which we measure on relationship RAROC. The growth has not come at the cost of compromising our risk-adjusted return on capital. So, it's just that we found multiple opportunities to penetrate existing customers, which have allowed us to grow in high -quality corporate loans. The last point I would leave for your consideration on corporate loans, which is also set out in our investor presentation, is close to 90% of the incremental loans given to corporates are to better-rated corporates. So, we have not gone down the credit spectrum. We've continued to protect our RAROCs and deepen our relationship with the customers, which has allowed us to grow that book successfully over the last few Quarters.