Private sector, Axis Bank reported an above expected performance for the last quarter of the fiscal 2008-09.

The net profit of the bank grew by 60.8% against 57.5% growth in the operating profits during the same period, last year. In the third quarter, Axis Bank had reported a year-on-year growth of 63.2% in its net profits. The bank has posted a strong net interest margin of 3.37% as compared to 3.12% during the December quarter in sequence with the cost of funds coming down. Fee based income has also been strong at 42% but it is lower than the previous quarter levels of 57%.

The cost of funds declined down to 6.64% and the proportion of cheaper current and savings accounts (CASA) stood at 43%.

Non-interest income was also higher by 52% on a year on year basis. The trading profits were substantially higher but core operating profit, which is operating profit less trading income, increased by 43% in the March quarter compared with 35% in the December quarter.

At the same time, the bank has also managed its risk fairly well with the net non-performing loans (NPLs) falling to 0.35% against 0.39% in the December quarter. The provisions increased because there was a write-back in provisions in the third quarter of the fiscal. The bank has been allowed by the RBI to restructure bad loans. Restructuring means that they could be classified as good assets and would require less or no provisioning. On the whole, restructured assets of the bank have gone up by an astonishing 158% and now account for 1.74% of gross customer assets, against 0.92% at the end of March 2008.

Although the loan book during the period grew at a slower pace of 37% against 55% recorded in the last quarter, yet it is much ahead of the growth reported by its fellow banks.

In its board meeting on Monday, Axis Bank has appointed Shikha Sharma as its new CEO. Appointment for this position had been a matter of concern since a long time.