Private sector lender Axis Bank reported a net profit of ₹Rs 1,682.67 crore in the September quarter of fiscal year 21, versus a loss of ₹Rs 112 crore in the same period last year, due to lower tax expenditure.
Total bank provisions and contingencies stood at ₹Rs 4,850.65 crore, an increase of 30% YoY (YoY). Your profit was greater than ₹Rs 1,476.6 crore estimated by a Bloomberg survey of 14 analysts.
“While we remain conservative in our policies and processes, we continue to seek growth wherever we see the right opportunity. We want to be at the forefront when it comes to our provisions and that is also reflected in this quarter, “said Amitabh Chaudhry, CEO of Axis Bank.
Net interest income (NII), the difference between interest earned and interest spent, increased 20% year-on-year to ₹Rs 7,326 crore and its Net Interest Margin (NIM), a key measure of profitability, stood at 3.58%, an increase of 7 basis points (bps) over the same period last year and higher. in 18 bps sequentially. Axis Bank’s other income, which includes commissions, business profits and miscellaneous income, fell 2% year-on-year to ₹Rs 3,807 crore in the three months to September 2020.
On the debt consolidation, Chaudhry initially told reporters that, as of September 30, he had no requests for restructuring. However, management later clarified that the bank has received insignificant requests that it does not intend to disclose at this time, however, as of September 30, no changes were made to its books.
“The restructuring is available to clients until December 31, 2020; they can make a request and we have a policy on how we will handle such requests. As of September 30, we have not granted any restructuring on any of our portfolio, “said Puneet Sharma, Chief Financial Officer of Axis Bank.
The bank’s gross delinquency ratio (NPA) (bad loans as a percentage of gross advances) stood at 4.18% in the second quarter of fiscal 21, a year-over-year decrease of 85 basis points and a sequential decrease of 54 basic points. After provisions, the NPL ratio was 0.98% in the second quarter, compared to 1.23% in the June quarter of fiscal year 21 and 1.99% in the prior year quarter.
On September 3, the Supreme Court ordered a provisional suspension of the bad debt classification if they did not declare it by August 31 and banks are expected to use this relaxation in the September quarter or until final orders are approved. As delinquency after August 31, its gross delinquency rate and its net delinquency rate would have been 4.28% and 1.03%, respectively.
The bank’s slippage in the second quarter of fiscal 21 stood at ₹931 crore compared to ₹2,218 crore during the first quarter and ₹4,983 crore in Q2FY20. The loan book slippages were in ₹Rs 741 million and investment exposures stood at ₹190 crore. Their recoveries and NPA updates during the quarter were ₹1,848 million rupees, while cancellations were ₹1,812 crore.
Amit Talgeri, the bank’s chief risk officer, said that on the retail side, the way the recast process works is that the client must establish, with adequate documentary evidence, that there has been an impact on their cash flows, income or business model.
“Yes, there is a certain underwriting element that occurs in each of these individual cases. When the client is not eligible or when he does not show us that he has been affected by covid-19, the client realizes the fact that he is not eligible according to these standards that we publish and that these regulatory guidelines include, “said Talgeri.
Axis Bank’s total advances, including investments in long-term repo transactions (TLTROs), grew 14% year-on-year to ₹5.94 trillion as of September 30, 2020. The bank’s loan-to-deposit ratio stood at 91% and retail loans grew 12% year-on-year to ₹3.05 trillion, which represents 53% of the bank’s net advances. The proportion of secured loans was 80% and mortgage loans made up 36% of the retail book.
On Wednesday, the bank’s shares fell 0.71 %% to close at ₹504.85 of the EEB.
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