India’s Axis Bank reported weaker-than-expected quarterly earnings after a sharp drop in trading income, even as it approved a major capital-raising plan worth about $2.12 billion.
According to Beyond Time News, the bank’s board cleared a fundraising proposal of up to 200 billion rupees through equity shares or similar instruments, pending regulatory approval.
Profit Declines Below Expectations
For the January–March quarter, Axis Bank posted a standalone net profit of 70.71 billion rupees, slightly down from 71.18 billion rupees a year earlier. Analysts had expected stronger earnings of around 73.16 billion rupees.
The decline was mainly driven by weaker treasury performance and pressure on trading income.
Sharp Drop in Trading Income
Pre-tax profit from treasury operations fell nearly 77% to 3.03 billion rupees. The bank said rising bond yields and regulatory restrictions on forex arbitrage by the Reserve Bank of India significantly impacted trading revenues.
Higher Provisions, Stronger Lending Growth
Provisions and contingencies more than doubled to 35.22 billion rupees, which the bank described as a voluntary measure and not linked to asset quality concerns.
Despite earnings pressure, lending activity remained strong. Loans grew 19% year-on-year, while deposits increased 14%, reflecting steady retail and MSME demand.
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Stable Interest Income and Improving Asset Quality
Net interest income rose 5% to 144.57 billion rupees, supported by consistent credit demand and improved loan performance.
The bank’s gross non-performing asset ratio also improved, falling to 1.23% in March from 1.40% in the previous quarter, indicating better asset quality trends.
Sector Outlook
The results come as major Indian lenders show mixed performance, with peers like HDFC Bank and ICICI Bank recently reporting stronger-than-expected profits driven by solid loan growth.
Axis Bank’s latest performance highlights pressure on trading income, even as core lending operations remain resilient.
