Tag: Axis Bank share price

Profit may jump 80%, NIM likely stable at 3.5%, BFSI News, ET BFSI

Banking & Finance

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NEW DELHI: Axis Bank is likely to report up to 80 per cent surge in September quarter profit on a late single-to-double-digit growth in net interest income (NII).

Analysts have estimated net interest margin (NIM) to fall in the 3.4-3.5 range. All eyes are on slippages, restructuring and accounts rated BB or below.

ICICIdirect said retail-oriented banks such as Axis should see meaningful reduction in stress accrued in the last quarter. The recent management commentary has also indicated that. It said credit cost should decline as a result of better show on the asset-quality front, while anticipating the bank profit at Rs 2,997 crore, up 78 per cent YoY. “NII is expected to grow 10 per cent to Rs 8,047 crore, driven by 11 bps expansion in NIM. Loan growth is expected to come in at 11 per cent YoY, led by traction in the retail segment. Within the retail book, growth should be driven by home loans. Deposits growth is expected at 17 per cent YoY with sequential 30 bps rise in CASA ratio,” it said.

Nirmal Bang Institutional Equities said the brokerage would log a 79.7 per cent YoY rise in net profit at Rs 3,023.60 crore. NII would grow 8.3 per cent YoY to Rs 793.11 crore but NIM would fall 27 basis points YoY to 3.4 per cent, it said. Credit cost was estimated to fall 100 basis points to 1.3 per cent.

The private lender has reported a 12 per cent rise in loans and advances at Rs 6,22,352 crore and a 15 per cent surge in deposits at Rs 7,30,772 crore.

Motilal Oswal Securities said the net profit would rise 64.2 per cent to Rs 2,760 crore and NII would go up 8.9 per cent to Rs 7,980 crore. NIM would remain stable at 3.5 per cent. On asset quality, gross NPA was seen at 4 per cent, compared with 3.9 per cent in June quarter and 4.2 per cent in the year-ago quarter. Axis Bank’s net NPA was seen at 1.2 per cent, the same as the June quarter, but higher than 1.1 per cent in the year-ago quarter.



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Who wanted to own Adani Green and Axis Bank offshore bonds?, BFSI News, ET BFSI

Banking & Finance

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MUMBAI: Global investors including Blackrock, Lombard, Washington State Investment Fund, China Asset Management, Fidelity Investment, Goldman Sachs Private Bank were among others to bid selectively for offshore bonds, launched by Adani Green Energy and Axis Bank Wednesday.

Both the issuances obtained multiple times higher subscriptions with funding costs tightening by 30-33 basis points.

Axis Bank decided to retail about $600 million out of an estimated $2.3 billion subscription bids until publication of this report, sources said. Adani Green raised $750 million out of total bids estimated at $3.5 billion.

While Axis Bank sold Additional Tier 1 papers with ‘sustainable’ or ESG tag, Adani Green mopped up funds for capital investments.

“The issuer shall use the proceeds towards eligible green project categories and eligible social project categories set out in the issuer’s sustainable financing framework,” said the Axis Bank term sheet, seen by ET.

Adani was offering three-year securities with initial price guidance of 4.7 per cent. Axis perpetual papers were initially guided to offer 4.4 per cent, with a five-year call.

Adani Green yielded 4.375 percent finally, and Axis bonds likely settled at 4.10 percent, dealers said.

Oppenheimer, Emirates NBD, HSBC Asset Management L&R Capital, China Everbright Securities bid for Axis Bank papers. Besides, Credit Suisse AG and Hong Kong-based Gaoteng wanted to own Adani papers.

Adani Green will likely use the proceeds for “onward lending to issuer’s subsidiaries for capital expenditure requirements to fund the development of utility green projects”.

Both pricings are likely to be tighter by 20 basis points from initial guidance, executives said.

Last month, ET reported on both issues.

The bank is seeking to raise up to $1 billion, while Adani Green is attempting to garner about $700 million.

Global Rating company Moody’s assigned B1(hyb) or (B+ in simple rating terminology) grade to Axis bonds. The rating rank is three notches lower than the bank’s general creditworthiness.

On August 26, ET wrote that Axis Bank was planning to raise up to $1 billion via offshore AT1 bonds, also known as perpetual papers.

HSBC, Citi, MUFG, JP Morgan, Bank of America, BNP Paribas, Standard Chartered and Societe Generale are among others that are helping the bank sell those bonds to international investors.

This issue is the second after HDFC Bank tapped global investors for the first time raising AT1 securities for $1 billion.

On August 9, ET wrote that Adani Green Energy was set to raise about $600 million through overseas bonds to quicken the execution of renewable projects in the next two years.

Barclays, MUFG, DBS Bank, BNP Paribas, Standard Chartered, and Mizuho are among the investment bankers working on the deal.

Individual investment banks, investors and issuers could not be immediately reached.

Moody’s Investors Service assigned a Ba3 (or BB-) rating to the dollar-denominated debt securities of Adani Green.

While the Adani bonds will be listed on the Singapore Stock Exchange, Gujarat GIFT City is the fund-raising platform for Axis.



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Yes Securities , BFSI News, ET BFSI

Personal Finance

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Yes Securities has buy call on Axis Bank with a target price of Rs 822. The current market price of Axis Bank Ltd. is Rs 783.75.

Time period given by analyst is Intra Day when Axis Bank Ltd. price can reach defined target. Axis Bank Ltd., incorporated in the year 1993, is a banking company (having a market cap of Rs 240332.38 Crore).

Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 20285.41 Crore, down -3.53 % from last quarter Total Income of Rs 21028.45 Crore and up 4.23 % from last year same quarter Total Income of Rs 19461.77 Crore. The bank reported net profit after tax of Rs 2356.91 Crore in latest quarter.

Investment Rationale
The stock has resumed the uptrend after breaking out of a Triangle pattern resistance on good volumes. Technical indicator RSI has turned upwards after forming a positive divergence, confirming the bullishness.

Promoter/FII Holdings
Promoters held 11.4 per cent stake in the company as of June 30, 2021, while FIIs held 53.7 per cent, DIIs 23.7 per cent and public and others 11.3 per cent.



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Axis Bank to now raise up to $1 billion via overseas AT1 issue, BFSI News, ET BFSI

Banking & Finance

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MUMBAI: Axis Bank joins its bigger peer HDFC Bank in selling Additional Tier 1 (AT1) bonds overseas, seeking to garner up to $1 billion in ESG-compliant instruments that should help the Mumbai-based private sector lender reduce its financing costs.

The ‘ESG’ (Environment Social Green) tag should lower the coupon in this round of offering by about 15 basis points, compared with the usual AT1 sales by similarly rated entities, four people familiar with the matter told ET. ESG funds are deployed in green and sustainable projects.

The bank has appointed about 10 investment bankers, including HSBC, Citi, MUFG, JP Morgan, Bank of America, Standard Chartered and Societe Generale.

Axis Bank did not reply to ET’s query. Investment banks couldn’t immediately be reached for comments.

Axis Bank is seeking to raise between $600 million and $1 billion depending on investor demand and pricing.

The initial price guidance could be in the range of 4-4.20 per cent, which would have been higher without the ESG tag, sources said. The ultimate pricing could be lower than the broad initial guidance.

The issue is expected to be launched in a week or two from Gujarat GIFT City depending on the outcome of the Jackson Hole policy meeting in the US, sources said.

“If Jackson Hole does not spring any negative surprise, roadshows are expected to begin from next week,” one of the persons cited above told ET.

The US Federal Reserve will hold its annual economic symposium in Jackson Hole, Wyoming, this Friday on August 27.

Earlier this month, HDFC Bank raised $1 billion amid overwhelming investor response.

Due to high demand, the pricing of those bonds was tightened by 43 basis points from the initial guidance to 3.70 per cent.

Axis Bank will have to offer more than this as the lender may be rated at least one notch lower than the HDFC Bank’s grade. Axis AT1 is expected to be graded as B+ or B, dealers said. The rating isn’t finalized yet.

Global rating company Moody’s rated them as Ba3 (or BB- in simple rating terminology), three notches below the deposit ratings.

A single notch by way of a lower rating can trigger a price differential of 50 basis points for a similar instrument, dealers said.

“The proposed ESG compliant papers will help cut the additional funding cost while creating space for expanding loans for sustainable projects,” said a senior executive involved in the deal.

AT-1 bonds are billed as quasi-equity securities that bear a higher risk of capital losses. Those are generally rated three-to-four notches lower than an issuer’s corporate credit rating.

Axis Bank’s overall capital adequacy ratio (CAR) was at 19.01 per cent in the June quarter with the CET1 (Common Equity) ratio at 15.2 per cent, much above the threshold limit.

Those gauges were at 17.47 per cent and 13.50 per cent, respectively, in the corresponding period a year ago.

The principal and any accrued interest would be written down, partially or in full, if Axis Bank’s CET1 ratio slips to 6.125 per cent later this year.



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Net profit rises 94% YoY, misses estimate; NII rises 11%, BFSI News, ET BFSI

Banking & Finance

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MUMBAI: Axis Bank today reported a 94 per cent year-on-year rise in net profit to Rs. 2,160 crore for the quarter ended June, which was above analysts’ estimate.

The lender reported a 11 per cent on-year growth in net interest income to Rs. 7,760 crore in the reported quarter, which was also below Street’s estimate.

The lender saw a marked deterioration in its asset quality in the quarter likely due to the second wave of COVID-19 pandemic. The gross non-performing assets ratio stood at 3.85 per cent in the June quarter as against 3.7 per cent in the previous quarter.

Similarly, the net NPA ratio rose to 1.2 per cent in the quarter from 1.05 per cent in the previous quarter. The lender’s gross slippages in the quarter jumped 23 per cent sequentially to Rs. 6,518 crore and was nearly three times from the year-ago quarter.

As on June 30, the bank’s provision coverage, as a proportion of gross NPAs stood at 70 per cent, as compared to 75 per cent in the year-ago quarter and 72 per cent in the previous quarter.



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Axis Bank CEO, BFSI News, ET BFSI

Banking & Finance

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NEW DELHI: Large banks with strong balance sheet would continue to grow faster than their peers in an environment impacted by the pandemic, and sustained fiscal and monetary support by the government and the RBI would help economic recovery by the second half of this fiscal, Axis Bank‘s top official said.

The impact of the second wave of COVID-19 continues, Axis Bank Managing Director and CEO Amitabh Chaudhry said.

“I…hope that the acceleration in vaccination drives and continued fiscal and monetary measures by the government and the (banking) regulator would help the economy to recover from this pandemic by H2 of fiscal 2021-22,” Chaudhry said in the bank’s annual report for 2020-21.

Axis Bank will further strengthen its core, he said adding that the building blocks are firmly in place with granularity built across businesses, improving operational performance, strong capital and balance sheet position to counter any unforeseen risks arising out of second COVID-19 wave.

He said the medium-term growth drivers are firmly in place on the back of several initiatives taken by the government to boost manufacturing and small industries, and the recent shift in global manufacturing supply chain dynamics towards India.

“In such an environment, large banks with healthy operational performance, strong balance sheet and capital position, superior risk management, and operational capabilities would continue to grow faster than the overall sector,” Chaudhry said in his message to shareholders in the annual report.

During 2020-21, the bank’s focus was on building granularity across businesses coupled with strong focus on execution that helped it deliver strong growth across focused segments, he said.

The bank’s CASA (current account savings account) deposits grew 20 per cent, with the share of CASA increasing by 3.72 percentage points to 45 per cent in overall deposits. The retail savings accounts grew 19 per cent, while the current accounts rose 26 per cent.

“Our corporate loan book, including TLTRO, grew 16 per cent, with significantly higher growth across our focussed segments like mid-corporates and MNC. Retail disbursements touched all-time highs during the fourth quarter (January-March 2021),” he said.

TLTRO is targeted long-term repo operations.

Axis Bank reported a 305 per cent growth in its net profit at Rs 6,588 crore during 2020-21.

“Our domestic subsidiaries delivered 75 per cent yearly growth in net profits. Our focus still continues to be further scaling up the subsidiaries so that they gain higher market share in their respective businesses,” said the official.



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