Country's third-largest private sector lender Axis Bank on April 28 reported a loss of Rs 1,387.78 crore for the quarter ended March 2020, missing the estimates of analysts polled by CNBC-TV18 which estimated profit for the quarter at Rs 1,580.1 crore.
The profitability was impacted largely due to spike in provisions, but higher other income, PPoP and NII limited the loss. The bank had reported a profit at Rs 1,505.06 crore in corresponding period last year and Rs 1,757 crore in December quarter.
Net interest income, the difference between interest earned and expended, increased 19.3 percent year-on-year to Rs 6,807.74 crore, which was a beat compared to CNBC-TV18 poll estimates of Rs 6,560.2 crore for the quarter.
Advances grew 15 percent YoY to Rs 5,71,424 crore as on March 2020, while retail loans rose 24 percent YoY to Rs 3,05,400 crore (which accounted for 53 percent of the net advances) and corporate loan book growth at 11 percent YoY to Rs 2,04,103 crore.
"83 percent of corporate book is now rated A and above with 95 percent of incremental sanctions in FY20 being to corporates rated A- and above," said the bank.
Total deposits on quarterly average basis grew by 19 percent and 17 percent YoY on period end basis, it added.
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On the asset quality front, gross non-performing loans as a percentage of gross advances dropped 14 bps sequentially to 4.86 percent in Q4FY20, and net NPAs declined 53 bps QoQ to 1.56 percent in March ended quarter.
Axis Bank recognised slippages of Rs 3,920 crore during Q4FY20, lower compared to Rs 6,214 crore in Q3FY20.
"Slippages from the loan book were at Rs 3,418 crore and that from investment exposures stood at Rs 502 crore. Corporate slippages stood at Rs 1,839 crore," the bank explained.
"Excluding one account of Rs 750 crore which got upgraded during the
quarter and downgraded again out of total corporate slippages, 84 percent of this came from previously disclosed BB and below rated clients (fund based loans, non-fund based loans and investment holdings), it further explained.
Recoveries and upgrades from NPAs during the quarter were Rs 2,489 crore while write-offs were Rs 1,270 crore.
Consequently, net slippages (before write-offs) for the quarter stood at Rs 1,431 crore compared to Rs 3,792 crore in Q3FY20, while net slippages
(before write-offs) in retail and SME stood at Rs 305 crore and Rs 107 crore respectively, the bank said.
Provisions and contingencies during the quarter stood at Rs 7,730.02 crore, increasing significantly by 185.1 percent year-on-year and 122.7 percent quarter-on-quarter.
The bank said it made other provisions aggregating Rs 3,526 crores in Q4FY20 of which Rs 3,000 crore is towards COVID-19.
"At March 31, 2020, the bank holds in aggregate additional provisions of Rs 5,983 crores. It is pertinent to note that this is over and above the NPA provisioning included in PCR calculations, and the 0.4 percent standard asset provisioning requirement on sStandard assets," it added.
The bank in its filing said other income during March quarter rose 13 percent year-on-year to Rs 3,985.46 crore, while pre-provision operating profit (PPoP) grew by 16.7 percent to Rs 5,851.11 crore YoY.
In financial year 2019-20, net profit fell sharply by 65 percent to Rs 1,627 crore compared to previous year, impacted by higher provisions taken in FY20 and the one time DTA charge taken in Q2 to incorporate revised corporate tax rates.
Adjusted for these one-offs, net profit for FY20 would have been Rs 5,182 crore, up 11 percent over previous year, said the bank.
NII in FY20 rose 16 percent YoY to Rs 25,206 crore.
In separate news, Axis Bank on April 28 said it will acquire a 29 percent stake in Max Life Insurance. With this acquisition, the total stake of Axis Bank in Max Life will be at 30 percent.
Meanwhile, in the last week, credit rating agency S&P Global Ratings revised the rating outlook of the bank to negative from stable.
"The negative outlook on Axis reflects our expectation that heightened economic risks facing India's banking system will likely affect the bank's asset quality and financial performance," it reasoned.
Axis plunged 50 percent in the quarter ended March 2020 and lost 51 percent in FY20, while the year-to-date (2020) loss for the stock stood at 44 percent, underperforming the Nifty Bank which fell 40.5 percent, 37 percent and 39 percent, respectively.