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Axis Bank posts first quarterly loss since listing in 1998 at Rs 21.8 bn

Asset quality deteriorated because gross NPAs as a percentage of advances increased to 6.77 per cent in the March quarter from 5.28 per cent in the December quarter

Axis Bank March Quarter

Nikhat Hetavkar & Shreepad S Aute  |  Mumbai 

Axis Bank

Private sector lender Axis Bank reported its first net loss, of Rs 21.8 billion, for the quarter ended March as non-performing assets (NPAs) soared and provisions for bad loans surged three times over the corresponding quarter last year.

The results were well below Street expectations on most key parameters, including profits. For instance, according to a Bloomberg poll, analysts were expecting a 46 per cent year on year fall in net profit to Rs 6.62 billion, but the bank’s corporate loans segment spoiled the show in the quarter.

Axis Bank had reported a net profit of Rs 12.25 billion in the March 2017 quarter. The net loss for the recently concluded quarter was contained because of a Rs 13-billion tax rebate, without which the net loss would have stood at Rs 35 billion.

Asset quality deteriorated, given that gross NPAs as a percentage of advances increased to 6.77 per cent in the March quarter from 5.28 per cent in the December quarter and 5.04 per cent in the March 2017 quarter. Net NPAs stood at 3.4 per cent, up 84 basis points sequentially.

The bank saw fresh slippages of Rs 165 billion. Of these, close to Rs 140 billion was on account of corporate loans. Of the slippages, the power sector accounted for 41 per cent.

Besides, the Reserve Bank of India’s (RBI’s) new NPA rules issued on February 12 also led to increased recognition of stressed assets as NPAs.



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First Published: Fri, April 27 2018. 01:31 IST