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Axis Bank Q4 results preview: Rs 5,400-5,500 crore loss likely amid Citi integration; NIM fall likely on high base


Axis Bank is expected to report losses to the tune of Rs 5,400-5,500 crore for the March quarter, thanks to Rs 11,603 crore in acquisition cost of Citi’s India consumer business that inclueds the latter’s  credit cards, retail banking, wealth management and consumer loans.

Emkay Global said Axis Bank is expected to sink into losses due to write-offs of goodwill on Citi Bank’s portfolio acquisition. This brokerage expects Q4 loss at Rs 5,526 crore. Net interest income (NII) is seen at Rs 12,184 crore, up 38.2 per cent YoY. Net interest margin (NIM) is seen at 4.1 per cent.

“Excluding Citi portfolio’s acquisition, Axis Bank’s growth is relatively slow, which should weigh on margins. Goodwill write-offs will lead to a technical loss for the bank. Slippages are expected to remain flat QoQ excluding Citi’s acquisition,” Emkay Global.

Excluding one-time expenses on Citi acquisition, Motilal Oswal expects a profit at Rs 6,000 crore, up 45.6 per cent YoY. It sees NII growing 41.4 per cent YoY at Rs 12,470 crore. Gross NPA is seen at 2.4 per cent against 2.8 per ent in the year-ago quarter.

Nuvama Institutional Equities said Axis Bank (ex-Citi) would likely report strong loan growth, but a decline in NIM. Including Citi too, its NIM would be broadly flat. The brokerage said NIM for the private bank may dip on a high base as it has been focusing more on non-retail growth in FY23 and its quality of deposits is relatively weak.

“The integration with Citibank is likely to impact the operational performance of the bank but business growth is expected to remain strong,” said ICICI Securities as it expects NII to grow 33.1 per cent YoY and 2.5 per cent QoQ to Rs 11,742 crore while net interest margin are see improvement of 10 basis points .

“CI ratio is expected to increase significantly mainly due to integration cost. On a sequential basis, provisions to increase to Rs 2,055 crore against Rs 1,438 crore in Q3FY23. Thus, we expect the bank to report a loss of Rs 5,487 crore. Asset quality to remain largely steady with GNPA ratio at 2.4 per cent, led by lower incremental slippages,” ICICI Securities said.

 

Also read: Wipro share buyback, Q4 results today. Earnings preview, stock price targets, buyback history & more



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