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Axis Bank Ltd. Performance Analysis

This document analyzes the profitability and financial ratios of Axis Bank over a 5 year period from 2016 to 2020. It provides data on key metrics like total assets, earning assets, interest bearing liabilities, equity, interest income, interest expenditure, provisions, and profit after tax. It then calculates and discusses various ratios to analyze Axis Bank's profitability, efficiency, liquidity, credit, capital and operating risks over this time period. The ratios either remained constant or declined in the most recent year, indicating issues with Axis Bank's investment efficiency, ability to generate profits, and use of debt.

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Surbhî Gupta
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57 views13 pages

Axis Bank Ltd. Performance Analysis

This document analyzes the profitability and financial ratios of Axis Bank over a 5 year period from 2016 to 2020. It provides data on key metrics like total assets, earning assets, interest bearing liabilities, equity, interest income, interest expenditure, provisions, and profit after tax. It then calculates and discusses various ratios to analyze Axis Bank's profitability, efficiency, liquidity, credit, capital and operating risks over this time period. The ratios either remained constant or declined in the most recent year, indicating issues with Axis Bank's investment efficiency, ability to generate profits, and use of debt.

Uploaded by

Surbhî Gupta
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Submitted by- SAKSHI SRIVASTAVA

PGSF1933

Axis Bank Ltd. Performance Ana

PROFITABILITY ANALYSIS

1 Total Assets
2 Earning Assets
Balances with RBI
Balances with Banks in Deposit Accounts
Balances with Banks & money at Call & Short Notice
Balances with Banks Outside India
Investments +
Advances +
Total Earning Assets
3 Interest bearing Liabilities
Saving Deposits
Term & Other Deposits
Borrowings
Subordinated Debt
Total Interest bearing liabilities

Equity Capital
Reserves
Total Equity
5 Interest Income
6 Interest Expenditure
10 Non-interest operating income
11 Non-interest operating Expenditure
12 Provisions and Contingencies
Provisions and Contingencies include provision for tax
Profit After tax

Short term securities


Provision for NPA
Wages and salaries
Tax
Net income before taxes

Profitability Ratios
Return on Assets= NI/ TA
Equity Multiplier TA/ TE
TE/ TA
ROE=ROA X EM

NI/ OR
OR/ TA
TA/ TE
OR*
(II - IE)/ TA
(OI-OE)/ TA
Provisions/TA
ROA

(II- IE)/E A
EA/ TA
(II - IE)/ TA

NIM
II/ EA
IE/ Intt Bearing Liab
Intt Bearing Liabilities/ EA
Spread

Efficiency ratio= Non intt exp/ (Net Interest Income+Non intt income)

Risk Ratios
Liquidity Risk= Short term securities/ Deposits
Interest Rate Risk = Interest Sensitive Assets/ Interest Sensitive Liabilities
Credit Risk = Provisioning / Assets
Capital Risk = Capital / Assets
Leverage ratio=
Total capital Total
ratio= equity/Total
(Total assets
equity + Long-term debt + Reserve for loan losses)/Total
assets
Provision for loan loss ratio= PLL/ TL (provision for loan losses/total loans and leases)
Loan Ratio = Net loans/ Total assets
Loss Ratio = Net charge-offs on loans (gross charge-offs minus recoveries)/ Total
loans and leases
Reserve Ratio = Reserve for loan losses (reserve for loan losses last year minus gross
charge-offs plus PLL and recoveries)/Total loans and leases

Nonperforming ratio= Nonperforming assets (nonaccrual loans and restructured


loans)/Total loans and leases

Operating efficiency (cost control)= Wages and salaries/Total expenses

Volatile liability dependency ratio= (Total volatile liabilities - Temporary


investments)/Net loans and leases

Other Financial Ratios


Tax
Gaprate
ratio==Total taxesrate-sensitive
(Interest paid/Net income before
assets taxesrate-sensitive liabilities)/ Total
– Interest
assets
Ltd. Performance Analysis

Mar-16 Mar-17 Mar-18 Mar-19 Mar-20


525,467.62 601,467.67 691,329.58 800,996.53 915,164.82

22,361.15 30,857.94 35,481.06 35,099.03 84,959.24


- - - - -
5,488.35 16,424.00 3,218.68 22,574.31 2,627.40
5475.939 2974.2406 4755.1526 9531.2896 9681.6412
122,006 128,793 153,876 174,969 156,734
338,773.72 373,069.35 439,650 494,798 571,424.16
494,105.36 552,118.90 636,980.97 736,971.91 825,426.76

105,793.13 126,048.29 148,202.05 154,128.81 173,591.62


188522.52 201328.76 209771.13 305077.20 376398.88
108,580.38 105,030.87 148,016.14 152,775.78 147,954.13

402,896.03 432,407.92 505,989.32 611,981.79 697,944.63

476.57 479.01 513.31 514.33 564.34


52,688.34 55,283.53 62,931.95 66,161.97 84,383.51
53,164.91 55,762.54 63,445.26 66,676.30 84,947.84
40,988 44,542 45,780 54,986 62,635
24,155 26,449 27,163 33,278 37,429
9371.76 11691.31 10967 13130 15537
- - - - -
3,709.91 12,116.96 15,472.91 12,031.02 18,533.91
4,241.96 4,988.90 1,671.19 3,009.84 2,891.25
8,224 3,679 276 4,677 1,627

196.21 167.29 113.52 159.82 138.85


56.9 172.25 174.68 153.18 171.14
665.8 644.06 730.38 821.22 867.71
251 148.68 97.85 113 38

0.017 0.007 0.000 0.006 0.002


9.88 10.79 10.90 12.01 10.77
0.00 0.00 0.00 0.00 0.00
0.16 0.07 0.00 0.08 0.02

0.49 0.20 0.01 0.22 0.06


0.03 0.03 0.03 0.03 0.03
9.88 10.79 10.90 12.01 10.77
16832.97 18093.12 18617.73 21708.17 25206.21
0.03 0.03 0.03 0.03 0.03

0.01 0.02 0.02 0.02 0.02


0.02 0.01 0.00 0.01 0.00

0.03 0.03 0.03 0.03 0.03


0.94 0.92 0.92 0.92 0.90
0.03 0.03 0.03 0.03 0.03

0.03 0.03 0.03 0.03 0.03


0.08 0.08 0.07 0.07 0.08
0.06 0.06 0.05 0.05 0.05
16.68 16.35 18.63 18.39 18.65

0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00

0.01 0.01 0.00 0.00 0.00


0.11 0.10 0.10 0.09 0.10
0.11 0.10 0.10 0.09 0.10
0.43 0.39 0.43 0.39 0.38
0.00 0.00 0.00 0.00 0.00
0.22 0.19 0.23 0.21 0.18
0.028 0.024 0.027 0.025 0.023
Analysis and comments
ROA is fluctuating every year, it is in a decreasing mode which means Axis bank is not in a
The trend here shows that thr ratio was constantly increasing since 4 years but in the 5th ye

The ROE is falling which indicates that the company is using much of its capital for generat

The net income of the bank is decreasing which means that the bank is not able to earn pro
This trend is showing that the assets are being used inefficiently as the ratio has remained
The trend is showing that the ratio is almost contant since 5 years that means that the comp

A good ratio equals 1 which means that the company owns more liabilities greater thanthe

The net interest margin is being constant since 5 years which means there is no improveme
The Ratio has remained same over the following years indicating that the asets are not bein

The net interest margin remains the same which means the investment efficiency is also co
The investment income has remained low over the years indicating that the bank needs to w

The yeild on earning assets is very low over the years indicating that the bank is not able to

The liquidity risk ratio remained constant which means that the bank is not abe to improve i

The credit risk ratio is almost negligibe in the following years which means that the borrowe
The capital to risk asset ratio is very low in the recent fve years which indicates that the ban
The company is very linient in financing its growth with debt and therefore it had taken a go
The ratio in this case is low which indicates that the efficiency and the financial stability of th

The loan ratio has changed slightly over the years which show that net loans take are cosid
The operating efficency ratio has remained low over the years indicating that the company
ns Axis bank is not in a good position as it is getting low returns compared to previous years on the investments they
4 years but in the 5th year it fall down that means Axis bank was using high amount of debts to finance all its assets.

of its capital for generating the profits

k is not able to earn profits and there is a high risk of this bank to be undergone in losses.
he ratio has remained very low over the period of 5 years
at means that the company is not using any debts to remain in the business or finance its assets

bilities greater thanthe assets

s there is no improvement in the investment efficiency and is stabe


at the asets are not being used much efficienty or we can even say that the bank is not able to generate passive inco

ent efficiency is also constant


hat the bank needs to work more on itself for generating some income which can comply with its earning assets.

the bank is not able to meet its short term obligations and is at a risky position.

is not abe to improve its risk position

means that the borrowers are able to pay off their debts well in time
h indicates that the bank are facing inefficiency in the system.
efore it had taken a good amount of debt which does not prove to be benificial for the company.
e financial stability of the banks is not very good

net loans take are cosiderabley more than its assets which is not a good indicator for the banks.
ating that the company is more efficient in generating the revenue versus the total expenses.
on the investments they are making
s to finance all its assets. Too much reliance on debt will increase the bankcruptcy risk and fall in credit rating

to generate passive income to its full capacity

th its earning assets.


all in credit rating

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