Axis Bank Q2 profit rises 35% to Rs 432.4 cr, asset quality worsens; slippages at Rs 8,936 cr

Private sector lender Axis Bank’s September quarter net profit was reported at Rs 432.4 crore, a rise of 35.5 percent from the same quarter in the corresponding period at Rs 319 crore.

But the bank’s asset quality registered a sharp worsening as net NPAs came in at Rs 14,052 crore against Rs 9,766 crore in the previous quarter. The net NPA ratio too rose to 3.12 percent against 2.3 percent quarter on quarter.

The gross NPAs were reported at Rs 27,402 crore against Rs 22,031 crore in the previous quarter and the ratio came in at 5.9 percent against 5.03 percent in the previous quarter.

The net interest income (NII) was reported at Rs 4,540 crore, while provisions soared to Rs 3,140 crore. NII is the difference between revenue generated from a bank's assets and the expenses associated with paying out its liabilities, according to Investopedia.

The gross slippages were seen at Rs 8,936 crore, while the write-offs were reported at Rs 2,517 crore.

The bank reported net interest margin of 3.45 percent against 3.63 percent quarter on quarter.

The bank further said that the asset quality was impacted by accelerated recognition of assets.

It explained that all nine accounts classified as standard assets till June have now become NPAs and fund-based outstanding to these nine accounts at Rs 4,867 crore are NPAs as well.

It outlined that one account in steel sector contributes Rs 1,128 crore, while three power sector accounts contributed Rs 1,685 crore and one account of IT/ITES sector contributes Rs 1,143 crore.