Gross slippages remained higher at Rs 4,798 crore at the end of June quarter 2019, against Rs 4,337 crore in corresponding period last fiscal and Rs 3,012 crore in March quarter 2019.
Private sector lender Axis Bank's June quarter (Q1) profit grew sharply by 95 percent year-on-year to Rs 1,370 crore, but provisioning and slippages remained higher. It was supported by NII, other income and operating profit.
The profitability was higher due to the low base in a year-ago period. The bank had reported a profit of Rs 701 crore in Q1FY19.
Net interest income increased 13 percent year-on-year to Rs 5,843.65 crore in the quarter ended June 2019, with 13 percent loan growth YoY.
"We continued to grow loan book cautiously and steadily. Domestic loan growth stood at 19 percent and retail loan book grew 22 percent YoY while domestic corporate loan book increased 16 percent YoY," the private sector lender said, adding deposits rose 21 percent YoY.
Numbers missed analyst expectations. Profit was expected at Rs 1,897.2 crore and net interest income at Rs 5,910.7 crore for the quarter, according to a poll of analysts conducted by CNBC-TV18.
Gross slippages remained higher at Rs 4,798 crore at the end of June quarter 2019, against Rs 4,337 crore in the corresponding period of the last fiscal and Rs 3,012 crore in Q4FY19.
"Recoveries and upgrades from NPAs during the quarter were Rs 2,177 crore while write-offs were Rs 3,005 crore. Consequently, net slippages for the quarter stood at Rs 2,621 crore compared to Rs 636 crore in Q4FY19 and Rs 1,420 crore in Q1FY19," the bank said.
The bank downgraded Rs 2,242 crore into the BB pool this quarter, mostly from groups that have shown new signs of stress in recent months. Post this action, its BB and below rated book remained largely stable QoQ and stood at Rs 7,504 crore, it said.
Asset quality remained stable in Q1. Gross non-performing assets as a percentage of gross advances declined 1 basis point sequentially to 5.25 percent and net NPA also slipped 2bps to 2.04 percent during the quarter.
Provisions continued to be elevated in the quarter ended June at Rs 3,814.6 crore, higher by 41 percent over the previous quarter and increased 14.3 percent compared to the year-ago period.
Provision coverage ratio, as a proportion of gross NPAs including prudential write-offs, improved to 78 percent in Q1, from 77 percent in previous quarter.
Non-interest income (other income) grew by 32.3 percent year-on-year to Rs 3,868.8 crore, driven by fee income growth of 26 percent YoY and operating profit jumped 35 percent to Rs 5,892.8 crore in Q1 on controlled operating expenses.The stock closed at Rs 706.55, down Rs 13.10, or 1.82 percent on the BSE, ahead of quarterly earnings.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.