Axis Bank posts 16% drop in Q1 net profit; makes additional provisioning in these sectors

Axis Bank on Tuesday announced its financial result for the quarter ended on June 30. The bank reported a net profit of Rs 1,305.60 crore, a drop of 16% as against Rs 1555.53 crore during the same period last year. In the fourth quarter of last fiscal, the bank had reported a net profit of Rs 1225.10 crore. 

The bank's net interest income for Q1FY18 rose by 2%  to Rs 4,616 crores during Q1FY18 from Rs 4,517 crores in Q1FY17. Net interest margin for Q1FY18 stood at 3.63%. 

GNPA (%) levels remain stable sequentially, Provision Coverage healthy at 65%. The bank's GNPA and Net NPA stood at 5.03% and 2.30%, respectively in Q1FY18. Gross slippages for Q1FY18 stood at Rs 3,519 crores down from Rs 4,811 crores in Q4FY17. Net slippage for the quarter stood at Rs 3,213 crores. 

This Q1, Axis Bank put in place a policy for making provisions for standard assets at rates higher than the regulatory minimum, based on evaluation of risk and stress in certain sectors as per the RBI circular dated 18th April 2017, stated in the statement. 

Accordingly, Axis Bank Bank has made enhanced standard asset provisioning at 1% on four sectors - power, infrastructure construction, iron and steel, and telecommunication services.

Against the sectors mentioned above, an additional provision of Rs 184 crores has been made during the quarter. 

During the quarter, the Bank sold assets with a gross outstanding of Rs 84 crores and a net book value of Rs 40 crores to ARCs against cash sale consideration of Rs 25 crores. 

Cumulative value of net restructured assets as on 30th June 2017 stood at Rs 5,336 crores, constituting 1.25% of net customer assets, compared to Rs 5,379 crores, constituting 1.31% of net customer assets as on 31st March 2017. 

Other income (comprising fee, trading profit and miscellaneous income) for Q1FY18 grew 10% YOY to Rs 3,000 crores as against Rs 2,738 crores during the same period last year.

While fee income for Q1FY18 grew 16% YOY to Rs 2,003 crores. Growth of fee income was driven by retail banking, which grew strongly 32% YOY and constituted 48% of the bank’s total fee income. Transaction banking fees grew 14% YOY and constituted 26% of the total fee income of the Bank. 

CASA deposits grew 25% YOY and constituted 49% of total deposits as on 30th June 2017. Savings Account Deposits and Current Account Deposits grew 22% YOY and 30% YOY, respectively for the period ended 30th June 2017.