This impressive performance is particularly noteworthy given the merger of Citi India's consumer business with Axis Bank in the fourth quarter of the previous fiscal year. As a result, year-over-year comparisons are not directly comparable.
Key highlights of Axis Bank's Q4 results include robust growth in net interest income (NII) and fee income. NII grew by 11% year-on-year to Rs 13,089 crore, reflecting the bank's ability to effectively manage its interest-earning assets and liabilities. Additionally, fee income saw a substantial increase of 23% to Rs 5,637 crore, underscoring the bank's diversified revenue streams.
Trading income also contributed positively to the bank's performance, with a gain of Rs 1,021 crore for the quarter. The net interest margin (NIM) for the quarter improved to 4.06%, up by 5 basis points sequentially, indicating efficient management of interest rate spreads.
Provisions for the quarter stood at Rs 1,185.31 crore, compared to Rs 305.77 crore in the same period last year. This increase was primarily driven by higher provisioning for non-performing assets (NPAs), which rose from Rs 270 crore in Q4 FY23 to Rs 832 crore. Fresh slippages during the quarter amounted to Rs 3,471 crore, reflecting ongoing challenges in asset quality management. However, the bank's provision coverage ratio remained healthy at 79%.
It is worth noting that Axis Bank did not utilize Covid provisions during the quarter, reclassifying them as other provisions. This decision underscores the bank's confidence in its ability to navigate the ongoing impact of the pandemic on asset quality and provisioning requirements.
On the asset quality front, Axis Bank reported improvements, with the gross NPA and net NPA levels standing at 1.43% and 0.31% respectively as of March 31. This represents a favorable trend compared to the previous quarter, where gross NPA and net NPA levels were higher at 1.58% and 0.36% respectively.
The bank's deposit base witnessed healthy growth, with total deposits increasing by 13% year-on-year. Notably, current and savings account (CASA) deposits accounted for 43% of the total, reflecting the bank's strong focus on retail and low-cost deposit mobilization.
Advances grew by 14% year-on-year to Rs 9.65 trillion, driven primarily by a robust 20% growth in retail loans. Retail loans now constitute 60% of the bank's net advances, highlighting the bank's strategic emphasis on retail lending.
In summary, Axis Bank's fourth-quarter results demonstrate resilience and agility in navigating a challenging operating environment. Despite headwinds posed by the pandemic and ongoing asset quality concerns, the bank has delivered strong financial performance, underpinned by robust growth in net interest income, fee income, and trading income. With a focus on prudent risk management and continued emphasis on retail banking, Axis Bank remains well-positioned to capitalize on growth opportunities in India's dynamic banking landscape.