Axis Bank Ltd.

Performance Analysis

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
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 equity/Total assets
Total capital ratio= (Total 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 rate = Total taxes paid/Net income before taxes
Gap ratio = (Interest rate-sensitive assets – Interest rate-sensitive liabilities)/ Total
assets
k 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
 1.565 0.612 0.040 0.584 0.178

9.88 10.79 10.90 12.01 10.77

0.10 0.09 0.09 0.08 0.09

15.469 6.598 0.435 7.014 1.915

0.511 0.209 0.018 0.246 0.069

0.031 0.029 0.023 0.024 0.026
9.884 10.786 10.896 12.013 10.773
16104.000 17585.000 15594.000 19005.000 23438.000
0.032 0.030 0.027 0.027 0.028

0.007 0.020 0.022 0.015 0.020

1.565 0.612 0.040 0.584 0.178

0.034 0.033 0.029 0.029 0.031

0.940 0.918 0.921 0.920 0.902

0.032 0.030 0.027 0.027 0.028

3.900 3.670 3.440 3.430 3.510

0.083 0.081 0.072 0.075 0.076
0.060 0.061 0.054 0.054 0.054
0.815 0.783 0.794 0.830 0.846

1.153 1.022 1.038 1.135 0.903

0.008 0.008 0.002 0.004 0.003

0.108 0.101 0.100 0.090 0.103
0.108 0.101 0.100 0.090 0.103

0.327 0.291 0.332 0.298 0.282

0.207 0.175 0.214 0.191 0.162

0.000 0.000 0.000 0.000 0.000

 Analysis and comments

In this case, we can depict Axis bank ROA decreasing year by year and has fallen drastically in Recent Financial Year and
reason is due to decrease in Net Income and in 2020 we can see ROA falls by 69.31%. Axis bank needs to increase their
ROA.
This shows that Axis finacial leverage is higher multiplier which means Axis is using high amount of debt to finance its assets
which will impact its credit rating. In 2020 its Mulltiplier reduces by 10.34% which is a good sign.

Here, Axis Bank ROE are not satisfactory in 2020 which indicates a negative return to invest in Axis Bank Ltd. Shareholders
funds are not properly utilised to generate return.

The bank's net income is declining, which means that the bank is unable to gain profits and losses. In 2020 it decreased by
72% which is not satisfactory.
This trend shows assets are not properly utlised and ratio needs to be increased to 1
SAME AS ABOVE, ALREADY EXPLAINED

SAME AS ABOVE, ALREADY EXPLAINED

The net interest margin is slighty increasing which means that the investment efficiency is slighlty getting better year after
year.
The higher the ratio, the more efficient the use of assets in a company or the more passive income your money is generating
for you and here Axis Bank needs to be more agrressive and ratio should me more than 1

In this case Axis Bank Ltd NIM is above 3% which is satisfactory.The most important ratio when it comes to banks and
financial companies is the is Net Interest Margin. It is the difference between the interest income generated and the amount
of interest paid out to their lenders (deposits), divided by total assets.An ideal financial company should have NIM above 3%.

Non-Interest operating Expense not found

If the risk ratio is 1 (or close to 1), it suggests no difference or little difference in risk (incidence in each group is the same). A
risk ratio > 1 suggests an increased risk of that outcome in the exposed group. A risk ratio < 1 suggests a reduced risk in the
exposed group.

The company's credit risk has decreased year on year, meaning that the company has less credit risk and less shifts in
reaching defaulters.
Axis Bank's capital risk rose in 2020 compared to 2019. This means that the bank has more money relative to its ownership
of assets.