Comments
Elevated stress level in the loan book affected Axis Bank’s bottomline in the first quarter ended June 30. India’s third-largest private sector bank reported a 21 per cent year-on-year decline in net profit at ₹1,556 crore for the first quarter of FY17 as against ₹1,978 crore in the year-ago period.
In a conference call on Friday, two of the bank’s top executives — V Srinivasan, Deputy MD, and Jairam Sridharan, CFO — observed that stress levels in their wholesale loan book remained elevated.
Net interest income (NII) grew 11 per cent year-on-year to ₹4,517 crore in (₹4,056 crore in Q1 FY16), while net interest margin stood at 3.79 per cent (3.81 per cent). The net interest margin (NIM) in FY17 is likely to remain above 3.6 per cent levels, according to the bank’s senior management.
Siddharth Purohit, Senior Equity Research Analyst – Banking, Angel Broking, said: “While the asset quality seems to have deteriorated, the management has reiterated its stand that the maximum credit cost for FY17 would be 150 basis points and this comes as a mild relief.
“While the bank looks confident, we believe the macro situation might result in a little more stress on the book in the near term. On the positive side, business growth remained decent with 21 per cent growth in loans.”
The bank’s balance sheet (total assets) grew 18 per cent y-o-y to over ₹5.34-lakh crore. Advances rose 21 per cent to over ₹3.44-lakh crore and deposits grew 16 per cent to over ₹3.57-lakh crore.
The proportion of current account and savings account (CASA) deposits to total deposits, also known as low-cost deposits, stood at 43 per cent.
Bad loans (gross NPAs as a percentage of gross advances) increased 116 basis points y-o-y to 2.54 per cent, while net NPA as a percentage of net advances increased 60 basis points to 1.08 per cent.
The cumulative value of net restructured assets of the bank on June 30 stood at ₹7,363 crore and constituted 1.99 per cent of net customer assets.
Capital adequacy ratio according to Basel-III norms stood at 15.67 per cent for Q1 FY17.
As on June 30, the bank had a network of 3,006 branches, 12,871 ATMs and 1,153 cash recyclers.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.