Tag: Axis bank

Uday Kotak loses more than what he earned in 2023 as the bank’s shares slump

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The massive selloff in Kotak Mahindra Bank shares wiped out close to ₹40,000 crore of investor wealth on Thursday (April 25). Noticeably, the founder Uday Kotak, who owns nearly 26% stake in the bank bore the heaviest brunt from the sell-down.

The net worth of the country’s richer banker declined by $1.3 billion on Thursday — which was more than what he earned last year. According to the Bloomberg Billionaires Index, the banker’s fortune increased by $942 million in 2023 to $14.6 billion.

While his fortune swelled by $3.3 billion in 2019, during the next year it surged further by $1.6 billion to $16.4 billion. However, the years 2021 and 2022 were not so good for the banker as he witnessed a decline of $1.4 billion and $1.2 billion, respectively. The data further shows that his average net worth over the last three years stood at $14.4 billion.

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Shares of Kotak Mahindra Bank tumbled 11% on Thursday after the Reserve Bank of India (RBI) banned the private lender from adding new customers through its digital channels and from issuing new credit cards. Thursday’s drop in the bank’s shares was the biggest single-day fall since March 2020. Analysts expect the RBI’s action will have a near-term drag on the lender’s shares.

According to Morgan Stanley, the impact on lender’s earnings will likely be limited over the next few quarters, as the bank is diversified and can accelerate growth in other segments to sustain earnings momentum. “We believe RBI’s move will weigh on the stock price in the near term,” said Morgan Stanley.

Additionally, the sell-off in Kotak Mahindra bank stock also resulted in its rival Axis Bank beating the former’s market capitalisation. However, it’s not for the first time that Axis Bank toppling Kotak Mahindra Bank in market valuation. Axis Bank had done so in September 2016 as well, when both the lenders had a market capitalisation of about ₹1.5 lakh crore.

Interestingly, Axis Bank was less than half the size of Kotak Mahindra Bank in November 2021. Since then, Axis Bank has added close to ₹1.5 lakh crore to its market valuation. In comparison, Kotak Mahindra witnessed a market cap erosion to the tune of ₹74,000 crore rupee during the same period.

Also Read: ‘Enjoying life as a private citizen’ — Uday Kotak on retirement

While the stock of Kotak Mahindra plummeted more than 10% in Thursday’s trade, shares of Axis Bank surged 6% after better-than-expected March quarter earnings bolstered investor sentiment. The gauge for bank stocks —the Nifty Bank index closed 1% higher at 48,494.95 points.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Axis Bank re-appoints Amitabh Chaudhry as MD and CEO till December 2027

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Axis Bank has announced the re-appointment of Amitabh Chaudhry as its Managing Director & Chief Executive Officer (MD & CEO) until December 31, 2027.

The re-appointment, effective from January 1, 2025, is subject to regulatory approval from the Reserve Bank of India (RBI) and the bank’s shareholders, the lender said in a regulatory filing.

Amitabh Chaudhry, 59, has been at the helm of Axis Bank since January 1, 2019, bringing with him a wealth of experience garnered from his tenure at HDFC Standard Life Insurance Company Limited (HDFC Life), where he served as the CEO for over nine years, the bank said.

Prior to his stint at HDFC Life, Chaudhry served as the MD & CEO of Infosys BPO.

Amitabh Chaudhry’s educational background includes a degree in Engineering from Birla Institute of Technology and Science, Pilani, and a Post Graduate degree in Business Management from IIM Ahmedabad.

Meanwhile, Axis Bank reported a net profit of ₹7,130 crore for fourth quarter of FY24, surpassing CNBC-TV18’s poll expectation of ₹6,207.4 crore.

In the same quarter of the previous financial year, the lender had reported a loss of ₹5,728.4 crore.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Uday Kotak loses over a billion dollars in net worth as Axis Bank takes Kotak Mahindra Bank’s spot

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Axis Bank Ltd. has overtaken Kotak Mahindra Bank Ltd. on Thursday to become the fourth largest lender by market capitalisation in India. This happened after Kotak Mahindra Bank’s shares declined 10% following the Reserve Bank of India’s directives barring the lender to onboard new customers through digital channels and from issuing new credit cards.

The net worth of Uday Kotak, the former managing director who still owns 26% stake in the bank, has fallen by $1.3 billion following the sharp sell-off in the stock.

As of Thursday, Axis Bank has a market capitalisation of ₹3.43 lakh crore, while Kotak Mahindra Bank, after a ₹30,000 crore market capitalisation erosion, commands a market capitalisation of ₹3.32 lakh crore.

HDFC Bank tops the list with a market capitalisation of ₹11.5 lakh crore, followed by ICICI Bank at ₹7.7 lakh crore. India’s largest lender, State Bank of India follows suit, with a market capitalisation of 7 lakh crore.

This is the first instance since September 2015 when Axis Bank has toppled Kotak Mahindra Bank in market capitalisation terms. Back then, both lenders had a market capitalisation of ₹1.5 lakh crore each.

Interestingly, Axis Bank was less than half the size of Kotak Mahindra Bank in market capitalisation terms in November 2021. Since then, Axis Bank has added close to ₹1.4 lakh crore in market capitalisation, while Kotak Mahindra Bank has lost ₹46,000 crore in market capitalisation.

Analysts who have coverage on Kotak Mahindra Bank said that while the impact on the lender’s profitability is likely to be minimal, it may have a greater impact in case the ban remains in place for a prolonged period. They also warned of a loss in reputation for the bank post the RBI action.

Kotak Mahindra Bank, the most expensive banking stock in India has delivered negative returns so far in 2024, declining 13%. In comparison, the Nifty Bank is unchanged for the year.

At current prices, Kotak Mahindra Bank has a one-year price-to-book multiple of 3.3x, while HDFC Bank trades at a multiple of 2.3x. ICICI Bank and SBI are trading at a multiple of 2.8x and 1.7x price-to-book respectively. Axis Bank trades at a price-to-book multiple of 1.9x on a one-year forward basis.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Axis Bank shares surge over 4% following Q4 results, brokerages ‘bullish’ on outlook

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of Axis Bank rose over 4% on Thursday, April 25, buoyed by robust fourth-quarter financial performance. The lender reported a net profit of ₹7,130 crore for the fourth quarter of FY24. This marked a shift from the same period in the previous financial year when the bank posted a loss of ₹5,728.4 crore.

In response to the results, brokerage firms expressed bullishness about the bank’s future trajectory.

Morgan Stanley issued an ‘Overweight’ call on Axis Bank, setting a target price of ₹1,450 per share.

The brokerage highlighted several key factors contributing to its positive stance.

“The bank’s Profit Before Tax (PBT) exceeded expectations by 4%, driven by a decent performance in Net Interest Income (NII) and fee income. Additionally, despite prevailing liquidity challenges, Axis Bank demonstrated 5% quarter-on-quarter growth in average deposits,” it said.

Notably, the Net Interest Income (NII) of the bank stood at ₹13,089 crore for the fourth quarter of FY24.

The bank saw total deposits grow by 13% year-on-year (YOY) and 6% quarter-on-quarter (QoQ) on the period-end basis, of which savings account deposits grew 2% YoY and 4% QoQ.

Morgan Stanley emphasised that the acceleration in deposit growth could serve as a significant catalyst for re-rating in the near future.

Brokerage firm Jefferies also expressed confidence in Axis Bank’s prospects, issuing a ‘buy’ call with a target price of ₹1,380 per share.

The brokerage noted a 13% beat on profit estimates, primarily driven by improved Net Interest Margins (NIMs).

Despite softer loan growth projections for FY25, Jefferies predicted that efforts to enhance the Loan to Deposit Ratio (LDR) and margin expansion initiatives could offset some of the impact.

Additionally, Axis Bank’s recent board approval for a ₹20,000 crore fundraise, equivalent to 13% of its net worth and representing a 6% dilution, was viewed as a strategic move.

While Jefferies slightly adjusted its estimates, it deemed Axis Bank’s valuations, at 1.7 times FY25 adjusted price-to-book (PB) and 10 times price-to-earnings (PE), as attractive.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Axis Bank Fundraise | Lender to get ₹35,000 crore via debt and ₹20,000 crore through equity

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Private sector lender Axis Bank Ltd on Wednesday (April 24) unveiled plans to raise ₹55,000 crore through a combination of debt and equity instruments.

The decision was approved by the bank’s board of directors, marking a move to significantly bolster its capital base and support future growth initiatives.

In a regulatory filing, Axis Bank outlined its intention to raise funds through various avenues, including the issuance of debt instruments in Indian and foreign currencies.

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These instruments may encompass a wide range of options such as long-term bonds, masala bonds, sustainable/ESG bonds (including green bonds), convertible debentures, non-convertible debentures, perpetual debt instruments, AT 1 bonds, infrastructure bonds, and Tier II capital bonds, among others.

The bank seeks to raise up to ₹35,000 crore through debt instruments, subject to the approval of its members, in accordance with the provisions of the Companies Act, 2013, and the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021.

Additionally, Axis Bank plans to raise up to ₹20,000 crore through equity shares, depository receipts, or any other instruments representing equity shares or convertible securities linked to equity shares.

The fundraising may be conducted through various channels such as qualified institutions placement (QIP), American depository receipts (ADRs), global depository receipts (GDRs), preferential allotment, or any other permissible mode or combinations, subject to the approval of members of the bank and relevant statutory/regulatory bodies.

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Shares of Axis Bank Ltd ended at ₹1,064.05, up by ₹7.60, or 0.72%, on the BSE.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Axis Bank Q4 results: Net profit stands at ₹7,130 crore, asset quality improves

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Axis Bank on Wednesday (April 24) reported a net profit of ₹7,130 crore, surpassing CNBC-TV18’s poll expectation of ₹6,207.4 crore. In the same quarter of the previous financial year, the lender had reported a loss of ₹5,728.4 crore

Net Interest Income (NII) stood at ₹13,089 crore, outperforming CNBC-TV18’s poll expectation of ₹12,803.9 crore.

Gross Non-Performing Assets (NPAs) slightly decreased to ₹15,127 crore compared to ₹15,893 crore in the previous quarter.

Net NPAs stood at ₹3,247 crore, with a gross NPA% of 1.42% and a net NPA% of 0.31%, reflecting improved asset quality metrics compared to the same quarter last year.

Furthermore, the provision and contingencies for Q4FY24 stood at ₹1,185 crore, with specific loan loss provisions at ₹832 crore.

The bank holds cumulative provisions (standard + additional other than NPA) of ₹12,134 crore at the end of FY24.

The full-year net profit of the bank stood at ₹24,861 crore versus ₹9,580 crore in FY23.

In a move to support its financial position further, Axis Bank’s board approved raising funds amounting to ₹20,000 crore.

Additionally, the board of directors recommended a dividend of ₹1 per equity share of face value of ₹2 per equity share for the financial year ended March 31, 2024.

Shares of Axis Bank settled at ₹1064.05 apiece, marking a 0.72% increase on the BSE.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Axis Bank Q4 results preview: Deposit growth expected to outpace loan growth,NIM may come under pressure

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Private sector lender Axis Bank is scheduled to release results for the fourth quarter of FY24 on Wednesday (April 24). For the January-March period, analysts are anticipating deposit growth to outpace loan growth. However, they believe that Net Interest Margin (NIM) may face pressure, and slippages are expected to increase on a quarterly basis.

According to a poll by CNBC-TV18, the bank is, however, anticipated to report a Profit After Tax (PAT) of approximately ₹6,207.4 crore, a turnaround from the previous quarter’s loss of ₹5,728.4 crore.

This will represent a 2.2% quarter-on-quarter (QoQ) increase.

Similarly, the Net Interest Income (NII) is expected to reach ₹12,803.9 crore, up 9% QoQ from ₹11742.2 crore in the preceding quarter.

Analysts have identified key factors to monitor closely during the earnings announcement.

Loan growth is projected to be around 14% year-on-year (YoY) and 4% QoQ, with a focus on high-yielding loan segments, a trend observed in recent quarters.

However, challenges such as potential pressure on Net Interest Margin (NIM) and expected rise in slippages QoQ pose areas of concern that analysts will be keen to assess.

Despite these challenges, Axis Bank’s asset quality is expected to remain stable QoQ.

In the last quarter, Axis Bank reported a 3.7% year-on-year (YoY) rise in net profit at ₹6,071.1 crore.

Net interest income (NII), which is the difference between the interest income a bank earns from its lending activities and the interest it pays to depositors, grew 9.4%, coming at ₹12,532 crore against ₹11,459.3 crore in the corresponding quarter of FY23.

The net interest margin (NIM) for the third quarter of FY24 stood at 4.01%.

Meanwhile, shares of Axis Bank were trading 0.58% up at ₹1,062.60 apiece on the BSE.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Axis Bank devalues select credit cards, introduces new reward exclusions, lounge access rules from today

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Axis Bank has announced overhaul across several of its popular credit cards, starting Saturday (April 20). These changes encompass alterations to lounge access, rewards programs, and associated services.

The impacted cards are Axis Magnus, Axis Atlas, IndianOil Axis, Axis Ace, Flipkart Axis Card, Axis Vistara Infinite, and Axis Privilege, according to Paisabazaar.

Common changes across cards

Among the notable revisions, Axis Bank has introduced spend-linked domestic lounge access across various tiers of its credit cards.

This program requires cardholders to meet a minimum spending threshold of ₹50,000 in the previous quarter to avail complimentary lounge access.

Additionally, the bank has added new exclusions to its rewards programs, with jewellery and insurance spends now falling outside the scope of earning rewards points across most cards.

Furthermore, concierge and meet and greet services have been removed, Paisabazaar said.

Changes to airline and hotel partnerships

Axis Bank has also revised its extensive list of airline and hotel partners, a key selling point for premium and travel-centric cards.

While the number of partners remains largely unchanged, they have been grouped with varied redemption capping, impacting users with specific brand loyalties.

This categorisation spans from premium cards like Magnus and Vistara Infinite to mid-range options like Axis Atlas.

Base cashback rates adjusted

Axis Bank has reduced the base cashback rate.

Axis Ace will now offer 1.5% cashback, down from 2%, while the Flipkart Axis Card’s cashback rate has been adjusted from 1.5% to 1%.

However, Axis Ace will continue to provide 5% unlimited cashback for transactions made through Google Pay.

Notably, utility bill payments via other platforms will no longer earn cashback.

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3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Indian banks may report smaller margins and fewer bad loans

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Banks are expected to witness a continued decrease in net interest margins in the January-March 2024 quarter due to tight liquidity and intense competition for deposits.

Below are the key expectations for the quarter.

As of March 22, the loan growth was around 20.1% year-on-year and around 3% quarter-on-quarter.

Low-cost deposit ratio has been declining for the last few quarters, an the downward trend may continue. The current account savings account (CASA) ratio is also likely to continue to decline in the fourth quarter for many players.

There could also be a slowdown in the operating profit growth rate, largely due to a decline in net interest margin and also because of lower trading gains.

Credit costs remain on the lower side for the sector, thereby aiding the bottom line and the return ratios.

However, earnings will be under pressure and there may be a decline for some lenders.

The banking sector is witnessing the best asset quality in over a decade and it will continue to remain in a sweet spot.

Slippages will be on downward trend. However, not too many upgrades are likely.

Key highlights will be the deposit mobilisation as it has lagged loan growth over the last few quarters. Hence, lenders’ outlook, with respect to focusing on deposit growth or slowing down loan growth, will be watched closely.

Kotak Securities estimates for some leading banks:

Brokerage firm Kotak Securities expects State Bank of India to post a net interest income (NII) decline of 0.5% year-on-year and up about 1% on a sequential basis.

Net profit is expected at ₹13,150 crore, down 21% year-on-year and up about 43.6% sequentially.

For Bank of Baroda, Kotak estimates NII to decline 2.2% year-on-year but up about 1.50% quarter-on-quarter.

However, they expect the profit to decline 7.2% year-on-year and about 3.2% sequentially.

For HDFC Bank, where the estimates are only sequential because of the merger of HDFC, Kotak expects NII increase of 3.50% and net profit rise of 22.3% largely aided by the other income.

For ICICI Bank, Kotak expects NII to be up about 3.7% year-on-year but a decline of 1.9% quarter-on-quarter.

Net profit is estimated to be up 4.6% year-on-year but down more than 7% quarter-on-quarter.

For Axis Bank, Kotak securities estimates NII to be up about 8.9% year-on-year and about 2% sequentially.

Net profit of Axis Bank is expected to decline by 1.7% year-on-year but rise 0.7% sequentially.

Speaking to CNBC-TV18, Nitin Aggarwal, Head of BFSI Research, Institutional Equity at Motilal Oswal Financial Services, believes that overall numbers are anticipated to moderate, a process ongoing for over a year.

According to Aggarwal, this quarter there is an expectation of a 6% earnings growth, excluding HDFC Bank for private banks, and approximately 12-13% for PSUs.

“In banking, we think the steadiness will continue in the numbers. We like ICICI Bank, where we are looking at a 16-17% year-on-year earnings growth, and SBI where we are projecting a ₹16,000 crore profit after tax (PAT). From southern private banks, we like IndusInd Bank, where we are expecting stable margins,” he said.

Saurabh Kumar, Senior Analyst for India Banking and Financial Research at JPMorgan, anticipates an increase in credit costs, particularly in the unsecured business.

Kumar will keenly watch the guidance on the current financial year’s loan and balance sheet growth.

Kumar noted that banks are likely to be valued based on growth prospects, as Indian banks’ credit quality remains among the strongest in the Asia Pacific region. Therefore, investors will focus heavily on growth opportunities.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow