Axis Bank on Thursday reported a net profit of Rs 1,505 crore in the March quarter of FY19 as against a loss of Rs 2,188.7 crore in the same period of last year. The rise in profit was aided by a fall in total provisions, which more than halved on a year-on-year (y-o-y) basis to Rs 2,711.4 crore in the year ago period.
The bank’s net interest income (NII) — difference between interest earned and interest expended — increased 21 per cent Rs 5,706 crore and its domestic net interest margin (NIM) — a key measure of profitability — stood at 3.61 per cent, up 2 basis points (bps) and down 5 bps sequentially. The other income, which includes core fee income, rose 26 per cent to Rs 3,526.28 crore in the three months ended March 2019. As of March 2019, the bank’s gross NPA and net NPA levels were 5.26 per cent and 2.06 per cent respectively, as against 5.75 per cent and 2.36 per cent respectively as of December 2018.
The bank has recognised slippages of Rs 3,012 crore during Q4 of FY19, compared to Rs 3,746 crore in Q3 of FY19 and Rs 16,536 crore in Q4 of FY18. “Corporate lending slippages stood at Rs 1,369 crore. 72 per cent of this came from disclosed BB & below accounts,” the bank said. Its shares closed 1.56 per cent lower at Rs 740.85 on the BSE on Thursday.
The bank’s BB and below rated book stood at Rs 7,467 crore. This is 1.3 per cent of the bank’s gross customer assets, significantly down from 7.3 per cent at peak.
As on March 31, 2019, the bank’s gross NPAs stood at Rs 29,789 crore and net NPAs at Rs 11,276 crore. “Recoveries and upgrades from NPAs during the quarter were Rs 2,376 crore while write-offs were Rs 1,701 crore. Net slippages (before write-offs) in retail and SME stood at Rs 215 crore and Rs 189 crore respectively,” the bank said. The bank said its provision coverage, as a proportion of gross NPAs including prudential write-offs, stood at 77 per cent up from 75 per cent in Q3 of FY19.
“During the quarter, the bank made multiple changes to increase conservatism in provisioning -— provision coverage on NPAs increased further from 75 per cent to 77 per cent and the bank made higher levels of standard asset provisioning against certain self-identified ‘stressed sectors’,” the bank added.