Money & Banking

Axis Bank Q3 net profit down 36%

Our Bureau. Mumbai | Updated on January 27, 2021

An ATM kiosk of Axis Bank in Chennai(File Photo)   -  THE HINDU

Private sector lender Axis Bank reported a 36.4 per cent drop in net profit in the third quarter of this fiscal despite a robust rise in net interest income as provisions rose sharply.

For the quarter ended December 31, 2020, Axis Bank’s standalone net profit stood at ₹1,116.60 crore against ₹1,757 crore in the same period a year ago.

“Reported profits after tax for the quarter are adversely impacted to the extent of about ₹1,050 crore on account of prudent expenses and provisioning charges during the quarter,” said Axis Bank in a statement on Wednesday.

Its net interest income (NII) grew 14 per cent to ₹7,373 crore in the third quarter of this fiscal from ₹6,453 crore a year ago.

“NII before interest reversals grew 19 per cent to ₹7,987 crore,” said Axis Bank. Net interest margin for the third quarter this fiscal was 3.59 per cent versus 3.57 per cent a year ago.

Non-interest income (comprising fee, trading profit and miscellaneous income) for the October to December 2020 quarter was roughly flat at ₹3,776 crore compared to ₹3,787 crore in the corresponding period last fiscal.

Rise in provisions

Provisions rose by 32.6 per cent to ₹4,604.28 crore in the third quarter this fiscal against ₹3,470.92 crore a year ago.

According to the bank, specific loan-loss provisions for the third quarter were ₹1,053 crore, compared to ₹2,962 crore a year ago. It has also made provisions on 90+ DPD accounts not classified as NPA pursuant to the Supreme Court judgment, at rates that would have applied to these accounts per extant provisioning rules for NPA in the banks, amounting to ₹3,899 crore during the quarter.

As on December 31, 2020, Axis Bank reported gross non-performing assets and net NPA levels at 3.44 per cent of gross advances and 0.74 per cent of net advances, respectively. Gross NPA was at 5 per cent and net NPA at 2.09 per cent as on December 31, 2019.

“The GNPA ratio as per said IRAC norms as on December 31, 2020, would have been 4.55 per cent and net NPA ratio would have been 1.19 per cent,” said Axis Bank. The restructured loans as of December 31, 2020, stood at ₹2,709 crore that translates to 0.42 per cent of the gross customer assets.

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Published on January 27, 2021
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