Axis Bank drops after poor Q1 result

Axis Bank fell 2.45% to Rs 524.40 at 9:16 IST on BSE after net profit fell 21.37% to Rs 1555.53 crore on 13.22% growth in total income to Rs 13852.18 crore in Q1 June 2016 over Q1 June 2015.

The result was announced after market hours on Friday, 22 July 2016.

Meanwhile, the S&P BSE Sensex was down 46.51 points or 0.17% at 27,756.73

On BSE, so far 55,000 shares were traded in the counter as against average daily volume of 7.03 lakh shares in the past one quarter. The stock hit a high of Rs 524.70 and a low of Rs 515 so far during the day. The stock had hit a 52-week high of Rs 598.45 on 23 July 2015. The stock had hit a 52-week low of Rs 366.65 on 18 January 2016.

The large-cap private sector bank has equity capital of Rs 477.52 crore. Face value per share is Rs 2.

Axis Bank said that the fall in net profit was due to a sharp surge in provisions and contingencies. Provisions and contingencies jumped 88.73% to Rs 2117.17 crore in Q1 June 2016 over Q1 June 2015. On a sequential basis, provisions and contingencies surged 81.21%. The bank's net interest income rose 11.36% to Rs 4516.92 crore in Q1 June 2016 over Q1 June 2015. The core operating profit rose 3.27% to Rs 3558.19 crore in Q1 June 2016 over Q1 June 2015. The figure of core operating profit is arrived at after deducing trading income from operating profit.

On absolute basis, Axis Bank's gross non-performing assets (NPA) edged higher to Rs 9553.17 crore as on 30 June 2016 from Rs 6087.51 crore on 31 March 2016 and Rs 4251.18 crore as on 30 June 2015. The ratio of gross NPA to gross customer assets edged higher to 2.54% as on 30 June 2016 from 1.67% as on 31 March 2016 and 1.38% as on 30 June 2015. The ratio of net NPA to net customer assets edged higher to 1.08% as on 30 June 2016 from 0.7% as on 31 March 2016 and 0.48% as on 30 June 2015.

Axis Bank attributed increase gross and net NPA to slippages from its watch list loans. As on 30 June 2016, loans outstanding on the bank's watch list reduced 10% over the previous quarter and stood at Rs 20295 crore. The reduction in the watch list primarily represents slippages to NPAs amounting to Rs 2680 crore, which comprises 92% of the total corporate credit slippages. The bank's provision coverage ratio declined to 69% as on 30 June 2016 from 72% as on 31 March 2016.

The cumulative value of net restructured assets as on 30 June 2016 stood at Rs 7363 crore, constituting 1.99% of net customer assets, compared to Rs 8072 crore, constituting 2.25% of net customer assets as on 31 March 2016.

The bank's advances grew 21% year-on-year (YOY) to Rs 3.44 lakh crore as on 30 June 2016. Retail advances grew 24% YOY and stood at Rs 1.43 lakh crore, constituting 41% of the net advances of the bank. Corporate credit grew 21% YOY and stood at Rs 1.58 lakh crore, constituting 46% of net advances. SME advances grew 13% YOY and stood at Rs 43611 crore as on 30 June 2016. Axis Bank said that the bank remains well capitalized to pursue growth opportunities.

Axis Bank is one of the biggest private sector banks in India.

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