On Thursday, Axis Bank will release its earnings report, and this time around, there may be several one-offs to consider, given the acquisition of Citi, and they will report numbers along with Citi’s retail business of India.
According to a CNBC-TV18 poll, the net interest income (NII) growth is projected to be over 35 percent year-on-year and 4 percent sequentially. However, the poll also anticipates a net loss of more than Rs 5,700 crore, compared to a profit of Rs 4,118 crore in the same quarter last year.
One of the most notable aspects to observe is that the NII growth on a YoY basis is expected to be one of the best in the last eight years. In contrast, the net interest margin (NIM) is predicted to decrease by 10 basis points, according to PhillipCapital's estimates.
PhillipCapital also estimates a loan growth of approximately 15.3 percent YoY and 7 percent sequentially, considering Citi's book as well. As a result, the total watchlist is expected to be around Rs 7,000-7,100 crore, and it will be closely monitored to observe how it moves.
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The asset quality is expected to improve, with gross NPAs estimated to be at 2.2 percent compared to 2.38 percent in the previous quarter, as per PhillipCapital.
However, slippage as a result of the formation of bad loans is projected to be Rs 4,000 crore, compared to Rs 3,807 crore in the previous quarter.
It is worth noting that approximately Rs 11,600 crore of provisions will be allocated for the Citi acquisition. Additionally, management's comments on the outlook for growth and current costs will be closely monitored, along with any fundraising approvals from the board.