Remember the new look Axis Bank (Bank Results Season – India Earnings Season – Q2 FY 2012

Axis Bank has been upbeat throught he crisis, a mid cap bank growing out under new leadership but had been stuck with a INR 750 Crs ($150mln) Qtrly profit the last two years except in March…In that light our first ‘lasting’ observatin for trader and investors alike is that in September they have evened the equation after a long time with 40%+ yoy growth numbers and just 31% FII ownership showing in a nice profile for the bank. 

Importantly, the bank grew NII 8% QoQ to INR 20 bln ( $400mln) and Advances outstrip ING and Indusind by 4X at INR 1400 bln or $28 bln. Its NIMs and Fee income ratios are still one of the higher in the industry and with RBI approvals, It will even add ENAM income to that line item this year in the 4 th quarter (as always)  In assets the bank is still only 65% of ICICI Bank/HDFC Bank Net NPAs have seemingly not been a concern at 0.34% though it seems unlikely as CAR has gone down from 13.68% to 11.35% yoy 

Half yearly Income shows a steady rest at a $1 bln run rate and with consistent quarters it loks like ready to explode in the not too distan future , rightsized for a hyoercycle in a growing Economy with a lot of distruibution spread in middle income india between the villages and the big cities

Advances have grown nearly 30% from September 2010. It is also one of the rare ones in the big league that has grown CASA (Jaypee report) to 42.2% 

The bank may enjoy another two quarters of precious pricing power based on increase in loan yields this quarter

Meanwhile SBI’s NPL(NPA) “games people play” show with the request for government cash has led the MoF to redo and tighten bank reporting norms to avoid further ambiguity even as they discuss with Moody’s on the unfortunate happenings. Axis Bank’s application to the regulators has changed its mode of purchase of Enam to direct cash and transfer of the IB business to a subsidiary. 

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