Axis Bank says stressed asset pool back to 'normal' levels

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26 Aug, 2025 12:21

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Axis Bank on January 22 reported lower-than-expected net profit for the October-December quarter on the back of higher provisioning.

The private lender said that it may continue to set aside more against bad loans going ahead, as slippages remain high.

"After the elevated levels of slippage in the last three quarters, the stock of our ‘BB’ rated portfolio has declined substantially and is now in line with normalised levels. We have continued to focus on what is in our control, strengthening our balance sheet and being conservative when it comes to rating downgrades, asset classification and provisioning," said Amithabh Chaudhry, Managing Director and Chief Executive Officer, Axis Bank.

The bank's watchlist or the below ‘BB’ rated loan book stood at Rs 5100 crore at the end of December 2019, with Rs 900 crore worth of fresh additions to the list in the quarter. The bank said that the pool of stressed assets has eased to a seven-year low level, which is less than 3 percent of the corporate loan book.

Axis Bank reported slippages of Rs 6,200 crore in the third quarter of current financial year. This is higher compared to slippages of Rs 4,798 crore in the first and Rs 4,983 crore in the second quarter this year.

About 81 percent of additional bad loans came from previously disclosed accounts, the bank said.

The bank's gross non-performing assets (NPA) ratio was at 5 percent in October-December quarter, from 5.75 percent in the same period last year. Its net NPA ratio also eased to 2.09 percent, from 2.36 percent a year ago.

"We might still want to be more prudent and conservative and want to increase the level of provision on existing NPAs as we go forward," said Jairam Sridharan, chief financial officer, Axis Bank. He added that the pool of stressed accounts may remain around the same levels, while slippages are likely to normalise going ahead.

The bank's provisions increased to Rs 3470.92 crore in the third quarter, from Rs 3,518.39 crore in the previous quarter. Its provisioning coverage ratio was at 78 percent, which is likely to move up going ahead, the bank said.