January 29, 2019 / 10:59 AM / a year ago

Axis Bank third-quarter profit beats estimates

(Reuters) - Axis Bank Ltd more than doubled net profit in its last quarter led by former Chief Executive Shikha Sharma, driven by higher interest income and recoveries from written-off accounts.

A visitor watches an Axis Bank's advertisement at its corporate headquarters in Mumbai, July 25, 2017. REUTERS/Danish Siddiqui/Files

The company said on Tuesday net profit rose to 16.81 billion rupees ($236.42 million) for the three months to Dec. 31 from 7.26 billion rupees a year earlier, beating the 11.97 billion rupees forecast on average by 24 analysts, I/B/E/S data from Refinitiv showed.

India’s banking sector has faced increased scrutiny amid issues including record-high bad loan levels and a $2 billion fraud uncovered at state-run Punjab National Bank early last year.

While the majority of India’s soured loans rest with state-run banks, Axis Bank and larger rival ICICI Bank Ltd account for the biggest chunk among private sector lenders.

After heading the bank for nine years, Sharma handed over the reins to Amitabh Chaudhry in December.

In the third quarter, Axis Bank’s gross non-performing loans fell to 5.75 percent of total loans at the end of December from 5.96 percent in the previous quarter, but were higher than 5.28 percent a year earlier.

Non-interest income jumped 54 percent to 40.01 billion rupees, driven by growth in fee income and the recovery of 9.98 billion rupees mainly from two written-off accounts, India’s third-biggest private sector lender by assets said in a filing to the exchanges.

Net interest income climbed 18.4 percent, boosted by a 13 percent growth in loans to 4.75 trillion rupees by the end of December. Compared with the same period last year, bad loan additions slowed by 15.4 percent to 37.46 billion rupees. reut.rs/2DG4uXw

Net interest margin - the difference between interest paid and earned and a key measure of profitability - rose to 3.47 percent from 3.36 percent in the previous quarter.

($1 = 71.1025 Indian rupees)

Reporting by Chris Thomas in Bengaluru; editing by Jason Neely and Emelia Sithole-Matarise

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