Axis Bank Q4 preview: Loss seen at Rs 4,800 crore due to Citi merger; NII expected to rise 37%

Axis Bank is expected to report a loss of Rs 4,800 crore for the quarter ended March 2023 (Q4FY23) due to the Citi merger, when it releases its financial results for the said period on April 27. Analysts at Zee Business Research further note that the loss could be in the range of Rs 2,900 crore to Rs 5,900 crore. The private sector lender had posted a profit of Rs 4,117.8 crore in the year-ago period. 

Net interest income or NII (net income earned minus total income paid) is seen growing 37.2 per cent YoY to Rs 12,100 crore against Rs 8,819.1 crore registered in the corresponding quarter of the previous fiscal. Loan growth is projected in the band of 15 per cent to 18 per cent while Street seems divided on deposit growth.

The bank's business is likely to grow while the net interest margin, as per Zee Business Research, will see a decline. Besides, credit costs and slippages, too, are expected to fall. Also, the analysts don't see any significant increase in treasury income. 

Asset quality is likely to improve as gross non-performing assets (GNPA) is seen at 2.2 per cent against 2.38 per cent YoY.  Net NPA is also expected to fall.

In March 2023, Axis Bank said it has completed the acquisition of Citibank’s retail business in India for a final cash consideration of Rs 11,603 crore. Last year, the lender agreed to purchase Citibank’s India Consumer Business from Citibank NA (acting through its branch in India) and the NBFC Consumer Business from Citicorp Finance (India) Limited (CFIL).

Axis, which has a retail book of nearly Rs 4 lakh crore, has acquired about 3 million unique customers of Citibank India, seven offices, 21 branches and 499 ATMs across 18 cities.

Citi’s retail book is nearly Rs 68,000 crore, of which retail loans account for Rs 28,000 crore. With 1.2 million bank accounts, the total Indian business contributes 1.5 per cent in profit to the lender’s global book. Apart from the institutional banking business, it will continue to focus on offshoring or global business support rendered from centres in Mumbai, Pune, Bengaluru, Chennai and Gurugram, as per a PTI report.