The country’s third largest private sector bank posted net profit of Rs 1,900 crore for the third quarter of 2014-15, against Rs 1,604.1 crore in the corresponding quarter of the past financial year.

The net profit was slightly higher than Street estimates. A Bloomberg consensus estimate was Rs 1,870 crore for the third quarter. Provisions and contingencies jumped 150 per cent from a year ago to Rs 507.1 crore.

“Last year in the same quarter, there was a write-back in provisions and as a result the base was low with provisions of only Rs 202 crore recorded in the same quarter last year,” said the bank spokesperson. In the same quarter last year there was a Rs 173-crore write-backs, in provisions on the investment book.

Asset quality remained stable; gross non-performing assets (GNPAs) and net NPAs (NNPAs) increased marginally year-on-year but remained flat sequentially. GNPA at the end of the December quarter was 1.34 per cent, against 1.25 per cent seen in the corresponding period a year ago. NNPA in the third quarter was 0.44 per cent, against 0.42 per cent in the year-ago period.

During the quarter, the lender added Rs 708 crore to gross NPAs. Recoveries and upgrades were Rs 225 crore and write-offs were Rs 194 crore. The value of net restructured advances at the end of the December quarter was Rs 6,808 crore, constituting 2.4 per cent of net assets.

The bank said it expected a gross stress addition of Rs 6,500 crore in FY15, of which Rs 3,539 crore was achieved in the first three quarters. Sanjeev K Gupta, executive director (corporate centre) & chief financial officer, said the bank will not be revising its target for gross stress additions, despite net additions being way below the forecast (‘guidance’).

“The total stress addition may be lower than what we have guided. But we will continue with our guidance.

Restructuring norms will be changing from the next financial year and, therefore, we expect more stress additions in the fourth quarter of the financial year,” he added.

Axis also said it was looking at forming a joint venture to apply for a payment bank. “We are talking to some possible partners to see how it can help us. On a broad-based basis, it will open new markets and these customers are potential lending customers,” said the management in a conference call.

Net interest income, the difference between interest earned and expended, was up 20 per cent to Rs 3,590 crore in the quarter, against Rs 2,984 crore in the year-ago period.

Other income inched up 24 per cent, on the back of robust growth from retail fee income and treasury income, to Rs 2,039 crore compared with Rs 1,644 in the December quarter last year.

Margins, however, dropped on a sequential basis as the lender pared its base rate by 10 basis points during the third quarter. Net interest margin of the bank was 3.93 per cent in Q3 against 3.97 per cent in Q2 and 3.71 per cent during the October-December period of last year.

Axis Bank’s board has approved a fund-raising plan of Rs 15,000 crore through issue of long-term bonds on a private placement basis.

The bank has already raised Rs 5,705 crore through infrastructure bonds this financial year. The share of current and savings account deposits was 40 per cent of all deposits at the end of the December quarter. The capital adequacy ratio was 15.6 per cent (including the net profit for December quarter of FY15), according to Basel-III norms. The Tier-I capital adequacy ratio was 12.4 per cent.

With regard to the payment bank plans, the Reserve Bank of India had in the final guidelines allowed players to form an alliance with a lender to form a payment bank.