Trading lifts Axis net 19% to Rs 1,978 cr, provisions zoom

Third-largest private lender Axis Bank today reported a 19 per cent growth in June quarter net at Rs 1,978 crore on jump in treasury income, but provisions were up almost three-fold, which capped the profit surge.
The Shikha Sharma-led bank saw a 36 per cent rise in other income at Rs 2,298 crore, driven largely by a 150 per cent rise in treasury gains of Rs 646 crore, while the core net interest income grew 23 per cent to Rs 4,056 crore.
The total income moved up to Rs 12,234 crore, from the Rs 9,980 crore in the year-ago period.

Its provisions steeply rose to Rs 1,121.77 crore, from Rs 386.60 crore a year ago, which included earmarking of Rs 790 crore for bad assets and around Rs 250 crore for contingency measures in future.
Its chief financial officer, S K Gupta, said the loan loss provisions were up due to a higher slippage at Rs 1,183 crore as the facility to restructure assets has been discontinued. The fresh slippages came from across sectors and segments, including large corporates, SME and retail.
During the quarter, it restructured Rs 740 crore of assets which were classified for recast previously.

The bank, however, said its asset quality performance for 2015-16 will be better than the last year's and is confident of reining in slippage below last fiscal's Rs 5,700 crore, Gupta said.

It's also keen to keep its credit costs, or provisions, under 0.90 per cent for the fiscal.
Its gross non-performing assets ratio moved up marginally to 1.38 per cent, from the earlier 1.34 per cent.
About two specific large exposures that have analysts worried, Gupta said the Jaypee Group companies are meeting their repayment obligations in a delayed fashion while Essar Steel is meeting its obligations.
According to reports, domestic rating agency CARE Ratings has downgraded the flagship company of the Jaypee Group to default category.