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Axis Bank, India's third-largest private sector lender by assets, said net profit for the March quarter shrank 1 per cent from a year earlier, falling short of expectations as provisions for bad loans ate into profits, amid a future that looks as bleak as the past quarter. The bank said net profit fell to Rs 2,154 crore from Rs 2,181 crore a year ago, boosted by more than doubling of earnings from retail lending even as its treasury and corporate division faltered. Bloomberg poll of analyst estimates showed profits could be Rs 2,330 crore. The operating environment during Q4 was tough and the investment climate hasn't changed markedly," Jairam Sridharan, CFO, Axis Bank, said. "From a sector standpoint, Q4 growth metrics both on credit and deposit side remained somewhat muted. The stress outlook remains elevated and the operating environment continues to remain challenging." The bank's net interest income, or the difference between interest earned on loans and that paid for funds, rose 19.8 per cent to Rs 4552.6 crore at the end of March 2016. It will pay a dividend of Rs 5 a share. The bank saw a good growth in its retail division with home and auto loans, where earnings outpaced corporate lending. Its pretax profit from retail more than doubled to Rs 747 crore, from Rs 334 crores a year earlier. Read more here- Stock Tips Today