Axis Bank Q1 profit falls 19% at Rs 1,112 crore

There was an uptick in provisions for bad loans and contingencies at Rs 4,416.42 crore for April-June, 2020-21 as against Rs 3,814.58 crore in the year-ago period.

Axis Bank Q1 profit falls 19% at Rs 1,112 crore

New Delhi: Axis Bank on Tuesday reported 19 per cent decline in standalone net profit at Rs 1,112 crore for June quarter of the current financial year.

The third largest private sector bank posted a net profit of Rs 1,370 crore for April-June, 2019-20.

Total income was almost flat at Rs 19,125.57 crore during the quarter under review, Axis Bank said in a regulatory filing.

There was an uptick in provisions for bad loans and contingencies at Rs 4,416.42 crore for April-June, 2020-21 as against Rs 3,814.58 crore in the year-ago period.

However, the asset quality showed improvement with gross non-performing assets (NPAs) declining at 4.72 per cent of gross advances as on June 30, 2020, from 5.25 per cent as at June-end last year. Net NPAs also fell to 1.23 per cent from 2.04 per cent a year ago.

"During the quarter, the bank introduced incremental provisioning on such exposures based on a time scale and on occurrence of predefined events. As a result, provisions and contingencies for the quarter ended June 30 are higher by about Rs 144 crore with a consequent reduction to the profit before tax," it said.

On consolidated basis, the net profit of the bank declined by 12 per cent to Rs 1,108.10 crore in the first quarter as against Rs 1,262.98 crore in the same period a year ago.

Total income stood at Rs 19,461.77 crore as against Rs 19,409.09 crore.

During the quarter, the bank's Net Interest Income (NII) grew 20 per cent to Rs 6,985 crore from Rs 5,844 crore in the same period a year ago. Net interest margin of the bank stood at 3.40 per cent.

The bank has recognized slippages of Rs 2,218 crore as compared to Rs 4,798 crore in the first quarter of the previous fiscal.?

"Slippages from the loan book were at Rs 2,011 crore and that from investment exposures stood at Rs 207 crore. Corporate slippages stood at Rs 1,355 crore. Recoveries and upgrades from NPAs during the quarter were Rs 608 crore while write-offs were Rs 2,284 crore," it said.

Axis Bank Managing Director Amitabh Chaudhry said, ?the disruption caused by the pandemic has led to immense economic and social impediments, however, it has also brought about innovations across the industry."

The extent to which the COVID-19 pandemic will impact the bank's operations and asset quality will depend on the future developments, which are highly uncertain, including among other things any new information concerning the severity of COVID-19 and any action to contain its spread or mitigate its impact whether government mandated or elected by the bank, the filing said.

On the proposed joint venture between Max Financial Services and Axis Bank, it said, the definitive agreement to become joint venture partners in Max Life Insurance Company Ltd was signed during the quarter on April 28.

Since then, the parties have approached the regulators for approval of the transaction and believe that the deal continues to be on track, it said.