Axis Bank net profit dips 43% to ₹1,225 cr as provisions rise

MUMBAI: Axis Bank Ltd on Wednesday reported a 43% decline in net profit in the March quarter from a year ago as the private sector lender raised provisions for bad loans.

The ₹1,225.10 crore net profit compares with ₹2,154.28 crore posted in the year-ago period, and ₹579.57 crore seen in the December quarter. A Bloomberg poll of 23 analysts had forecast a net profit of ₹872.90 crore.

Provisions and contingencies fell 32% to ₹2,581.25 crore from ₹3,795.80 crore in the December quarter, but were 121% higher than ₹1168.33 crore a year ago.

During the quarter, the bank saw slippages worth ₹4,811 crore. Total slippages from corporate lending stood at ₹4,320 crore, of which 83% came from a watch list of loans that the bank expects could turn bad. The watch list outstanding at the end of March quarter stood at ₹9,436 crore.

According to Jairam Sridharan, chief financial officer of Axis Bank, the power sector contributed 60% to the watch list, which the bank intends to remove after March.

Net interest income, or the core income a bank earns by giving loans, increased 3.87% to ₹4,728.60 crore from ₹4,552.59 crore last year. Other income jumped 11.85% to ₹3,013.16 crore.

Gross NPAs rose 3.98% to ₹21,280.48 crore at the end of the March quarter from ₹20,466.82 crore in the December quarter.