Axis Bank’s Global Depository Receipt (GDR) fell 4 percent during early trading hours in the US market, after the lender reported a weaker than expected earnings on back of deteriorating asset quality in the first quarter of the financial year 2025-26.
According to the London Stock Exchange website, Axis Bank’s GDR was trading at $64.50 at 7:41 PM IST, as compared to $67.60 close on the previous trading session.
GDR is a financial instrument that represents shares of a foreign company or banks, enabling companies to raise capital from international investors.
The asset quality of the bank deteriorated in April-June quarter on sharp increase in the gross slippages due to technical impact. The gross and net non-performing asset (NPA) ratio of the bank increased by 30 basis points (Bps) and 15 bps, respectively, on a yearly basis.
On a sequential basis, gross and net NPA ratios rose by 29 and 12 bps, respectively.
The technical issue for the bank, which led to sharp rise in gross slippages, after bank recognized some cash credit, overdraft, and settled loan accounts as non-performing assets (NPAs).
The bank in the press release had said that the prudent application of technical parameters for recognizing slippages and consequent upgrades impacted reported asset quality parameters including provisions and contingencies for the quarter ended June 30, 2025 (“Technical Impact”).
Technical Impact is largely restricted to cash credit and overdraft products and one time settled accounts.
In the reporting quarter, gross slippages of the bank stood at Rs 8,200 crores, compared to Rs 4,805 crore in Q4FY25 and Rs 4,793 crores in Q1FY25. Bank reported a gross slippage, excluding technical impact, of Rs 5,491 crore in Q1FY26.
The agriculture portfolio of the bank has contributed 25 percent to the gross slippages in the first quarter of the current financial year, bank’s management said during the post earning media call.
“About 25 percent of slippages are from the agri portfolio,” management said.
The management also said that unsecured portfolio has contributed to remaining gross slippages in Q1. “We do not see any stress in the secured loans,” management added.
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