Axis Bank’s Financial Fortress: Solvency Secure, Investors Cheer

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Axis Bank has put any concerns about its financial stability to rest by showcasing impressive results for the quarter and the year ending March 31, 2025. They've also announced some ambitious plans to raise capital to fuel future growth.

Key Highlights

Strong Capital Position:

The Capital Adequacy Ratio (CAR) is at a solid 17.07%, with a Common Equity Tier 1 (CET1) ratio of 14.67%, well above what regulators require.
The bank boasts a hefty liquidity buffer, holding over ₹1 lakh crore in excess Statutory Liquidity Ratio (SLR).

Enhanced Asset Quality:

Gross Non-Performing Assets (NPA) have decreased to 1.28%, and Net NPA is down to just 0.33%, showcasing robust asset quality and effective risk management.
The provision coverage ratio remains strong at 75% of gross NPAs.
The credit cost for Q4FY25 is a low 0.50% (annualized), indicating careful provisioning.

Profitability and Growth:

In Q4FY25, net profit jumped 13% quarter-on-quarter to ₹7,117 crore, with the full-year Profit After Tax (PAT) reaching ₹26,373 crore, a 6% increase year-on-year.
The Net Interest Margin (NIM) for Q4FY25 improved to 3.97%.
Deposits grew by 10% year-on-year to ₹11.73 trillion, while advances increased by 8% to ₹10.41 trillion, driven by strong retail and SME lending.

Dividend and Fundraising:

The board has recommended a dividend of ₹1 per share for FY25, reflecting confidence in the bank’s performance.
Plans are in motion to raise ₹20,000 crore through equity and up to ₹35,000 crore via bonds and other debt instruments, further bolstering the capital base.
Market Confidence:
Axis Bank’s shares have risen by 13% since the beginning of the year, indicating strong investor confidence in its fundamentals.

Management Insight:

The bank’s leadership is committed to maintaining a focus on deposit quality, cost efficiency, and balanced growth across corporate, retail, and SME segments.

Conclusion

Axis Bank’s latest results and forward-looking strategies clearly demonstrate its strong solvency position, robust capital buffers, and effective risk management. With healthy profitability, improving asset quality, and ambitious growth plans, Axis Bank stands well-equipped for sustained success in the years ahead.

Source: Business Standard