AXIS BANK’S PRE-TAX PROFIT FALLS 31%

Private sector lender Axis Bank on Tuesday reported a 31.29 per cent year-on-year drop in profit before tax for the first quarter ended June 30. This was owing to higher provisions booked in the current quarter, and also due to the firm moving towards a more conservative mode of accounting. The lender’s PBT stood at ~1,427.98 crore, against ~2,078.18 crore in the year-ago quarter.

Axis Bank on Tuesday reported a 31.29 per cent year-on-year (YOY) drop in profit before tax (PBT) for the first quarter ended June 30 owing to higher provisions and a more conservative mode of accounting.

The lender’s PBT stood at ~1,427.98 crore, against ~2,078.18 crore in the year-ago quarter. Net profit after tax in Q1 fell 19 per cent to ~1,112.17 crore. The bank said it would have booked profit after tax of ~1,626 crore for the quarter if accounting practices were not changed.

Other income, which includes fees and commissions earned from selling third-party products, fell to ~2,586.68 crore, from ~3,868.76 crore in the year-ago quarter. The net interest income grew 20 per cent YOY to ~6,985 crore.

Provisions rose to ~4,416.42 crore in the first quarter under review, vis-à-vis ~3,814.58 crore in the year-ago quarter. The bank said it also holds additional provisions, including for Covid-related stress of ~6,898 crore, of which ~915 crore was provided in the quarter.

The bank holds Covid-related provisions of ~3,733 crore, against the RBI requirement of ~659 crore, the management said in a call with the media.

Just about 9.7 per cent of the bank’s advances books are under moratorium, the bank management said. In the first phase of moratorium, the share was 25-28 per cent of the advance’s books. In the first phase, the bank said, customers were uncertain about their liquidity prospect and therefore availed moratorium in larger numbers. In the second phase, however, customers wanted to pay back and the bank also advised the customers on the need or lack of it in availing moratorium and the financial implication in both cases. The management said credit card spent had returned to 75 per cent of the pre-covid level and should normalise by the third quarter.