Business

 Axis Bank, one of India's leading private-sector banks, reported a significant net loss of ₹5,728 crore for the fourth quarter of FY2025, a sharp contrast to the ₹4,118 crore profit recorded in the same quarter the previous year. This downturn was primarily attributed to the acquisition of Citibank's India consumer business, which led to substantial one-time costs. Despite this, the bank's core operations showed strength, with a 33% year-on-year increase in Net Interest Income (NII) to ₹11,742 crore and a rise in Net Interest Margin (NIM) to 4.22%. The Gross Non-Performing Asset (GNPA) ratio improved to 2.02%, down 80 basis points from the previous year, indicating better asset quality. Additionally, the bank's capital adequacy ratio stood at a healthy 17.64%, with a Common Equity Tier 1 (CET1) ratio of 14.02%.​

Following the announcement, Axis Bank's share price experienced a decline of over 4%, reflecting investor concerns about the immediate financial impact of the acquisition. However, analysts remain cautiously optimistic about the bank's long-term prospects. Brokerages such as Jefferies and Motilal Oswal have maintained 'Buy' ratings, setting target prices of ₹910 and ₹930, respectively. They highlight the bank's strong deposit growth, improved asset quality, and strategic expansion into premium segments as positive indicators. Jefferies also notes that the recent fundraise approval of ₹20,000 crore could provide the necessary capital to support future growth initiatives.​

On the other hand, some analysts express caution. JPMorgan has a 'Neutral' rating with a target price of ₹750, citing concerns about the bank's slower loan growth and higher slippage ratios. Goldman Sachs also maintains a 'Neutral' stance, setting a target price of ₹742, due to Axis Bank's relatively lower profitability compared to its peers.​

In conclusion, while Axis Bank's Q4 results were impacted by the Citibank acquisition, the underlying fundamentals remain robust. Investors should consider both the short-term challenges and the long-term growth potential when making investment decisions. The bank's strategic initiatives, including its expansion into premium market segments and digital banking, could position it well for future growth. However, monitoring the integration process and its impact on financial performance will be crucial in assessing the bank's trajectory.​

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