Strong advances growth help Axis Bank gain 5 per cent on BSE

Strong Q1FY21 results helped the private banking player, Axis Bank to jump nearly 5 per cent during the early trade on Wednesday.

The key trigger in the results noted by the market was 20 per cent YoY growth in the net interest income (NII), which is basically the difference between total interest earned by the bank for a given period and the interest expense of the bank during the same period.

The gain on this parameter for Axis Bank is considered positive as it may depict the limited effect of loan moratorium. In addition to this, the bank also reported advances growth of 13 per cent on YoY basis. The advances in the balance sheet of the bank show the total amount of credit it has till the accounting date.

In terms of COVID-19 related efforts, the bank reported that 9.7 per cent of its outstanding loan book was under moratorium as of the end of the first quarter of the current fiscal year. In total, the bank reported loan loss provisions of Rs 3,512 crore for Q1FY21 as compared to Rs 2,886 crore during the same period YoY. The bank made higher provisions of nearly Rs 733 crore this quarter for COVID-19 related efforts.

The results by the bank look strong in the core fundamental parameter. Further, the street would take note of the fact that other banks may also show strong resistance to the COVID-19 challenges.

At 10.30 am, the shares were trading higher by 4.5 per cent at Rs 467.35 on BSE. The price quote is still down by nearly 4 per cent from its intraday high.