Axis Bank announces financial results for

             AXIS BANK ANNOUNCES FINANCIAL RESULTS FOR THE QUARTER                                     AND YEARENDED 31stMARCH 2021

Axis Bank reportsFY21PATof `6,588crores, up 305% YOYBalanced growth, improving profitability, resilient balance sheetoQ4FY21 PAT at `2,677crores,up 140% QOQ, Operating Profit up 17% YOYand 13% QOQ oQ4FY21Net Interest Income up 11%YOY, Fees up 15% YOYand16% QOQoCASA (on QAB basis) up 18% YOYand 7% QOQ, CASA ratio at 42%, improved 320 bps YOY and39bps QOQoLoan book (including TLTRO) grew12% YOYand 8% QOQ^,Retail disbursementsin Q4FY21at all-time highsoMarket share in UPI and Mobile banking for FY21 stood at 17% and 16%, respectivelyoImproving asset quality, GNPA% at 3.70% declined by 116bps YOY and 85bpsQoQ oBalance sheet strengthened, PCR improved to 72% from 69%YOY, Total CRARat 19.12%with CET1of 15.40% oOne Axis: Domestic subsidiaries gained market share,delivered strong PAT of `833crores, YOY growthof 75%  

The Board of Directors of Axis Bank Limited approved the financial results for the quarter and yearended 31stMarch 2021at its meetingheld in Mumbai on Tuesday, 27thApril2021. Axis Bank has been at the forefront of customer centric innovations and announced a series of cutting-edge solutions last quarter. In a first for Indian banks, Axis Bank launched its range of wearable contactless payment devices ‘Wear N Pay’ that are secure and budget-friendly, available in the form of bands, key-chains and watch loops. 

The Bank launched ‘Aura’ -a credit card for the health conscious, curated with several health and wellness benefits, like free doctor consultations, fitness sessions, health check-ups etc. Axis Bank also announced its strategic partnership with Hyundai Motor India to offer smart auto retail financing solutions to urban and rural customers, enabling quick and hassle-free online car financing. The bank launched and scaled anarray of new digital products. The digital savings and current account products already operate at scale and have delivered superlative customer experience as well as financial benefits.  

Launched in October, Grabdeals -a platform for everyday discounts, has received great response from customers and will be scaled up further this year. Along with Freecharge, a new product ‘Buy Now Paylater’was introduced. Axis Bank also launched digital outward remittance and digital forex card issuance, enabling customers to access forex easily via the Bank’s digital channels. Further, Whatsapp Banking with a full scale integration of products across Savings Accounts, Credit Cards, Deposits and Loans, has made Banking as easy as sending a message. The efforts received both customer validation and recognition. 

The Bank was awarded ‘Best Digital Bank in India’ by Asiamoney and Financial Express for the second and third consecutive year respectively and ‘Best Bank –Innovation’ by Business Today, amongst a host of other prestigious accolades. Amitabh Chaudhry, MD&CEO, Axis Bank said, “As an organization, we have traversed a phenomenal distance last year. We have transformed ourselves in line with the evolving business scenario to become more agile, more relevant and totally dedicated to the needs of millions of customers. From strengthening our digital capabilities, providing flexible employment opportunities to playing our part in the community during these difficult times, Axis has come a long way and we hope to continue with the good work.” 

Results at a Glance

Strong operating performance, net profit for FY21 at `6,588 crores, up 305% YOY  

Q4FY21  

PAT grew 140% QOQ to `2,677 croresoNII grew 11% YOY to `7,555crores; NIM*stood at 3.56% improving by 1 bps YOY oFee income grew 15% YOY & 16% QOQ. Retail fee grew 17% QOQ& contributed 64% to total feeoOperating profit grew 17% YOY &13% QOQ to `6,865 croresoCredit cost at 1.70% improving 106bps YO Y

FY21 

NII grew 16% YOY to `29,239 crores; NIM stood at 3.53%, improving by 2 bps YOYoOperating profit grew 10% YOY to `25,702 crores, cost to assets at 1.96%, improving 13 bps YOY

Loan growth driven by all three business segments

Loan book (including TLTRO1investments) grew 12%YOY and 8% QOQ^oDomestic retail loans grew 11% YOY and 7% QOQ^; 81% of the Retail book is securedoRetail disbursements for the quarter were at new all-time highs. Disbursements in Consumer segment were up 45% YOY & 44% QOQ, Rural disbursements grew 47% YOY & 47% QOQoCorporate loans (including TLTRO investments) grew 16% YOY and 9% QOQ
SME loan book grew 13% YOY and 10% QOQ

Steady growth in stable and granular retail deposits 

On QAB2basis, CASA grew 18%YOY and 7%QOQ, RTD deposits grew 14%YOY and 4%QOQ. oOn QAB basis, SA grew 17%YOY &6%QOQ, Retail SA grew 20% YOY, CA grew 18% YOY &10%QOQoOn QAB basis, CASA ratio stood at 42%, up 320 bpsYOY and 39 bps QOQ

Well capitalized with adequate liquidity buffers 

Overall capital adequacyratio (CAR)including profit for FY21 stood at 19.12% with CET 1 ratio of 15.40%oCOVID provisions of `5,012 Crores, not inCAR calculation providesadditional cushion of 69 bps oAverage LCR3during Q4FY21 was 115% with exit LCR of ~105%, excess SLR#of `57,915crores 

Balance sheet buffers strengthened with high PCR and additional provisions metricsoNNPA at 1.05% decreased by 51bps YOY and 14bps QOQoCumulative provisions (standard + additional other than NPA) translate to 1.95% of our standard loans oOn an aggregated basis (specific+ standard+ additional + Covid), our coverage ratio stands at 120% of GNPA at 31stMarch, 2021 

Bank’s domestic subsidiaries delivered strong performance, Max Life stake acquisition completed

Cumulative FY21 PAT$at `833 crores, up 75% YOYoAxis AMC’s FY21 PATdoubled YOY to `242 crores, AAUM growth of 42% YOYoAxis Finance FY21 PAT was `211crores; asset quality remains stable, with nil restructuring oAxis Capital FY21 PAT stood at `166crores, up 66% YOY.oAxis Securities FY21 PAT at `166 crores, was over 10x of its FY20 PAT 

 Profit & Loss Account: Period ended 31stMarch 2021 

Operating Profit and Net ProfitThe Bank’s operating profit for the quartergrew 17% YOY and 13% QOQ to `6,865crores.Net profitforQ4FY21stood at `2,677crores, as compared to loss of `1,388crores in Q4FY20.

Net Interest Income and Net Interest Margin The Bank’s Net Interest Income (NII) grew 11%YOY to `7,555crores inQ4FY21from `6,808crores in Q4FY20.Net interest margin(NIM)for Q4FY21was 3.56%,as against 3.55% for Q4FY20.Other IncomeFee income for Q4FY21stoodat `3,376crores, up15% YOYand 16% QOQ. Retail fees grew 16% YOY and 17% QOQ;and constituted 64% of the Bank’s total fee income.The corporate & commercial banking fee grew 14% YOYand 15% QOQ.The trading profits and miscellaneous income for the quarter stood at `789crores and `503croresrespectively.

Overall, non-interest income (comprising of fee, trading profit and miscellaneous income) for Q4FY21 grew 17% YOY to `4,668crores, from`3,985croresin Q4FY20.Provisions and contingenciesSpecific loan loss provisions for Q4FY21were `7,038crores(including reclassification of NPA provision of Rs 4,266 crores on account of Supreme Court judgment shown as other provision in prior quarter), compared to `4,204croresin Q4FY20. During the quarter, the Bank has made additional provision aggregating Rs. 803 crores on account change in NPA provision rates on loans to Commercial Banking segment. Net of the above 2 adjustments, specific loan loss provision for Q4 FY21 would have been Rs.1,969 crores.The Bank holdscumulative provisions(standard+ additional other than NPA) of`12,010crores at the end of Q4FY21. It is pertinent to note that this is over and above the NPA provisioning included in our PCR calculations. 

Thesecumulative provisions translate to a standard asset coverage of 1.95% as on31st March, 2021.On an aggregated basis, our provision coverage ratio (including specific + standard + additional + Covid provisions) stands at 120% of GNPA as on31st March, 2021.Creditcost for the quarter ended March 31, 2021 (net of CBG provisioning policy change) stands at 1.21% as compared to 2.77% at Q4FY20.FY21 Financial Performance:Net interest incomefor FY21 grew16%YOY to`29,239croresfrom `25,206croresin FY20. The operating expenses grew by 6% YOY andthe cost to assets ratio stood at 1.96%. Operating profit grew by 10%YOYto`25,702croresfrom `23,438crores in FY20. Total provisions for FY21 stood at `16,896crores,down9% over the same period last fiscal. Net profit for FY21 grew 305% to`6,588crores from `1,627 crores in FY20.

Provisions and contingencies Specific loan loss provisions for Q4FY21were `7,038crores(including reclassification of NPA provision of Rs 4,266 crores on account of Supreme Court judgment shown as other provision in prior quarter), compared to `4,204croresin Q4FY20. During the quarter, the Bank has made additional provision aggregating Rs. 803 crores on account change in NPA provision rates on loans to Commercial Banking segment. Net of the above 2 adjustments, specific loan loss provision for Q4 FY21 would have been Rs.1,969 crores.The Bank holdscumulative provisions(standard+ additional other than NPA) of`12,010crores at the end of Q4FY21. It is pertinent to note that this is over and above the NPA provisioning included in our PCR calculations. Thesecumulative provisions translate to a standard asset coverage of 1.95% as on31st March, 2021. 

On an aggregated basis, our provision coverage ratio (including specific + standard + additional + Covid provisions) stands at 120% of GNPA as on31st March, 2021.Creditcost for the quarter ended March 31, 2021 (net of CBG provisioning policy change) stands at 1.21% as compared to 2.77% at Q4FY20.FY21 Financial Performance:Net interest incomefor FY21 grew16%YOY to`29,239croresfrom `25,206croresin FY20. The operating expenses grew by 6% YOY andthe cost to assets ratio stood at 1.96%. Operating profit grew by 10%YOYto`25,702croresfrom `23,438crores in FY20. Total provisions for FY21 stood at `16,896crores,down9% over the same period last fiscal. Net profit for FY21 grew 305% to`6,588crores from `1,627 crores in FY20 

Balance Sheet: As on 31stMarch2021 

The Bank’s balance sheet grew 9% YOY and stood at `9,96,118crores as on 31stMarch2021. The total deposits grew by 10% on period end basis and by 9% YOY on quarterly average balance (QAB) basis.On QAB basis, Savings account deposits grew 17% YOY and 6% QOQ, Retail savings deposits grew 20% YOY, current account deposits grew 18% YOYand 10% QOQ; and retail term deposits(RTD)grew 14% YOYand 4% QOQ. On QAB basis, CASA and RTD deposits puttogether grew16% YOYand 6% QOQ. The share of CASA plusRTD deposits in total depositson QAB basis was up 535bps YOY to 86% as of 31stMarch 2021. The Bank’s advances including TLTRO investments grew 12% YOY to `6,41,794crores as on 31stMarch2021. 

 The Bank’s loan to deposit ratio stood at 88%, improving by 109bps YOY. Retail loans grew 10%YOY and 7% QOQ^ to `3,34,514crores and accounted for 54%of the net advances of the Bank. Domestic retail loans grew 11% YOY and 7% QOQ^. The share of secured loans was 81%with home loans comprising 36% of theretail book. Retail disbursements touched new all-timehighs led by higher contribution from secured loan segments. Disbursements in Consumer segment were up 45% YOY & 44% QOQ, with secured segments like home loansup 73% YOYand 45% QOQ, and LAP up 53% YOY and 51% QOQ. SBB disbursements grew 71%YOYand 42% QOQ. SME loan book grew 13% YOY and 10% QOQ^to`69,850crores. 89%of the SME book is secured with predominantly working capital financing, and is well diversified across geographies and sectors. Corporate loan book including TLTRO investments grew by 16%YOYand 9% QOQ^.85% of corporate book is now rated A-and above with 94%of incremental sanctions in FY21being to corporates rated A-and above.  

The book value of the Bank’s Investments portfolio as on 31stMarch 2021, was `2,26,120crores, of which `1,84,190crores were in government securities, while `34,904crores were invested in corporate bonds and `7,026croresin other securities such as equities, mutual funds, etc.Out of these, 74%are in held till maturity (HTM) category, while23%of investments are available for sale (AFS) and 3%arein held for trading (HFT) category. 

Digital Axis Bank continues to remain among the top players in the Digital banking space. •169% -YOY growth in mobile banking transaction volumes in Q4FY21, with FY21 market share of 16% •158% -YOY growth in total UPI transaction value in Q4FY21. FY21 market share in UPI transactions at17% •88% -Share of digital transactions in the Bank’s overall transaction mix during Q4FY21•74% -Bank’sactive customers that were digitally active in Q4FY21•74% -Credit cards sourced through digital channels in Q4FY21•71% -Fixed deposits (by volume) opened digitally during FY21 •71% -SA accounts opened digitally through tab banking in FY21•57% -Personal loan disbursements through digital channels in FY21 •57% -New mutual fund SIPs sourced through digital channels in Q4FY21 

The Bank has invested heavily in building digital capabilities and has over 800people dedicated to the digital agenda. The Bank’s focus remains on reimagining end-end journeys, transforming the core and becoming a partner of choice for ecosystems.

Wealth Management Business –Burgundy 

The Bank’s wealth management business has seen strong growth and is among the largest in India with assets under management of over `2,13,085crores as at end of 31stMarch2021. BurgundyPrivate that was launched in December 2019 for the high and ultra-high net worth clients, has scaled up rapidly to cover over 1,666families from 853 families last year. The combined assetsfor Burgundy Private increased by 183% YOY to `50,028crores as at 31stMarch2021. 

Capital Adequacy and Shareholders’ Funds 

The shareholders’ funds of the Bank grew 20% YOY and stood at `1,01,603crores as on 31stMarch 2021. Under Basel III, the Capital Adequacy Ratio (CAR) and CET1 ratio as on 31stMarch 2021including FY21 profitswere 19.12% and 15.40% respectively.Additionally, the Bank held `5,012 crores of COVID provisions, not considered for CAR calculation providingcushion of 69bps over the reported CAR.The Book value per equity share increased from `301as of 31stMarch, 2020 to `332as of 31stMarch 2021. 

The Board of Directors of the Bank at their meeting held today have considered it prudent to not propose any dividend for the year ended 31stMarch, 2021, in light of the situation developing around Covid-19 in the country and related uncertainty that it creates.Asset QualityAs on 31stMarch 2021, the Bank’s reported Gross NPA and Net NPA levels were 3.70% and 1.05% respectively as against 4.55% and 1.19% as on 31stDecember 2020.This reflects decline of 116bps and 51bps respectively on a YOY basis andadecrease of85bps and 14bps on GNPA and NNPA respectively on a sequential basis.Gross slippages during the quarter were `5,285crores, compared to `7,993croresduring Q3FY21 and `3,920 crores in Q4FY20. Slippages from the loan book were at `5,038crores and that from investment exposures stood at `247crores. Recoveries and upgrades from NPAs during the quarter were `3,462crores while write-offs were `5,553crores. Consequently, there werenet slippagesin NPAs (before write-offs) for the quarter of `1,822crores as compared to`5,831 crores in Q3FY21and net slippagesof `1,431crores in Q4FY20. As on 31stMarch2021, the Bank’s provision coverage, as a proportion of Gross NPAs stood at 72%, as compared to 69% as at 31stMarch 2020 and 75% as at 31stDecember 2020. 

The standard restructured loans under resolution framework for COVID-19 related stress as at March 31, 2021stood at `1,848crores that translates to 0.3% of the gross customer assets.The Bank carries a provision of 26% on restructured loans, which is in excess of regulatory limits. 

NetworkAs on 31stMarch2021, the Bank had a network of 4,594domestic branches and extension counters situated in 2,596centres compared to 4,528domestic branches and extension counters situated in 2,559centres as at end of 31stMarch2020. As on 31stMarch2021, the Bank had 11,333ATMs and 5,710cash recyclers spread across the country.The Bank’s Axis Virtual Centre channel expanded during the year from three centres to six centres and hadover1500 Virtual Relationship Managers as on 31stMarch 2021. 

Network As on 31stMarch2021, the Bank had a network of 4,594domestic branches and extension counters situated in 2,596centres compared to 4,528domestic branches and extension counters situated in 2,559centres as at end of 31stMarch2020. As on 31stMarch2021, the Bank had 11,333ATMs and 5,710cash recyclers spread across the country.The Bank’s Axis Virtual Centre channel expanded during the year from three centres to six centres and hadover1500 Virtual Relationship Managers as on 31stMarch 2021. Stake acquisition in Max Life Insurance Axis Bank completed the stake acquisition in Max Life Insurance Company Limited (Max Life) earlier thismonth and now together with itssubsidiaries, Axis Capital and Axis Securities, owns12.99% stake in the Company and isa co-promoter of the Company. The Bank has3 nominee directors on the Board of Max Life. Axis Bank has shared a strong business relationship with Max Life for over a decade now distributing the long-term saving and protection products to nearly 20 lakh customers, generating aggregated total premium of over `40,000 crores through this partnership. Both companies have invested extensively in product and need-based sales training, thereby leading to a consistent increase in productivity. 

The Bank believesthat this strategic partnership would further strengthen and deepen its relationship leading to better integration and alignment of the teams. To enhance customer trust further and highlight the strength of the partnership, Max Life’s tag line will now include the Axis Bank name.Key Subsidiaries’ PerformanceThe Bank’s domestic subsidiaries delivered strong performance with reported total PAT of `833crores, up 75% YOYover the FY20 total profit of `477crores.•Axis AMC: Over the last two years, Axis AMC has strengthened its positioning driven by strong leadership team and innovative product launches on the equity savings side including global and sustainability strategies.Axis AMC’s average AUM for the quarter grew by 42% YOY to `1,66,148crores and its FY21 PAT grew 100% YOY to `242crores from `121 crores in FY20.•Axis Finance: Over last 2 years Axis Finance has been investing on building a strong customer focused franchise. In FY21, disbursement grew 50% YOY.Retail book constituted 17% of total loanswhile the wholesale business delivered ROE of 19%+with focus on well rated companies and cash flow backed transactions. Axis Finance remains well capitalized with Capital Adequacy Ratio of 20.4%. 

The asset quality metrics remain stable with net NPA at 2%. Axis FinanceFY21 PAT was `211crores, up 9% YOY.•Axis Capital: It continued to maintain its leadership position in ECM,and was at the forefront of revival in capital market activity during the year. Axis Capital completed 60 investment banking transactions in FY21 that included highly successful QIPs in financial services and REITs space.Its FY21 PAT stood at `166 crores, up 66% YOY. 

Key Subsidiaries’ Performance 

The Bank’s domestic subsidiaries delivered strong performance with reported total PAT of `833crores, up 75% YOYover the FY20 total profit of `477crores.•Axis AMC: Over the last two years,  

Axis AMC has strengthened its positioning driven by strong leadership team and innovative product launches on the equity savings side including global and sustainability strategies.Axis AMC’s average AUM for the quarter grew by 42% YOY to `1,66,148crores and its FY21 PAT grew 100% YOY to `242crores from `121 crores in FY20.•Axis Finance: Over last 2 years 

Axis Finance has been investing on building a strong customer focused franchise. In FY21, disbursement grew 50% YOY.Retail book constituted 17% of total loanswhile the wholesale business delivered ROE of 19%+with focus on well rated companies and cash flow backed transactions. Axis Finance remains well capitalized with Capital Adequacy Ratio of 20.4%. The asset quality metrics remain stable with net NPA at 2%. Axis FinanceFY21 PAT was `211crores, up 9% YOY.•

Axis Capital: It continued to maintain its leadership position in ECM,and was at the forefront of revival in capital market activity during the year. Axis Capital completed 60 investment banking transactions in FY21 that included highly successful QIPs in financial services and REITs space.Its FY21 PAT stood at `166 crores, up 66% YOY 

Axis Securities: During the quarter, Axis Securities acquired customer trading accounts of Karvy Stock Brokingto become the 3rdlargest brokerage with total cumulative base of over3.6 million customers.Axis Securities’broking revenues for FY21 grew122% YOY to `425crores, net profit for FY21 at `166 crores grew to 10x of its FY20 PAT