Axis Bank logs surprise Rs 2,189-cr loss in Q4

Higher provisioning for bad loans takes toll on private lender

Axis Bank, the country’s third-largest private lender in terms of assets, on Thursday reported a surprise net loss of Rs 2,188.74 crore for the fourth quarter ended March 2018 due to higher provisioning for bad loans.

The bank had, however, registered a net profit of Rs 1,225.10 crore in the same quarter of fiscal ended March 2017.

The lender substantially raised its provisioning to cover for bad loans and contingencies during the quarter to Rs 7,179.53 crore, while it had parked aside Rs 2,581.25 crore in the same quarter a year ago, the bank said.

Loan slippages for the quarter stood at Rs 16,536 crore, with Rs 13,938 crore from corporate lending.

Axis Bank's asset quality deteriorated, with gross nonperforming assets rising to 6.77 per cent of the total loans at the end of the March quarter, from 5.28 percent at the end of December. The net NPA ratio worsened to 3.4 per cent from 2.5 per cent.

Provisions for bad loans jumped to Rs 7,179.53 crore compared to Rs 2,811 crore in the previous quarter.

Slippages of Rs 16,536 crore were recognised during the fourth quarter, said the bank. Most of the slippages came from power sector. The sector alone contributed to about 40 per cent of all bad loans generated this quarter, Axis Bank’s chief financial officer Jairam Sridharan said. Another Rs 13,938 crore slippages came from corporate lending. The bank’s watchlist fell 92 per cent and stood at Rs 428 crore during the quarter.

Total income of the bank during January-March 2018 stood at Rs 14,559.85 crore, slightly up from Rs 14,181.31 crore earned in the same period of 2016-17.

Also for the entire fiscal 2017-18, the bank's a net profit fell by 92.5 per cent to Rs 275.68 crore as against a profit of Rs 3,679.28 crore last fiscal.

Total income during the fiscal increased to Rs 56,747.40 crore from Rs 56,233.47 crore. “This includes an accelerated recognition in the stressed loan book of the Bank, particularly in the power sector,” Axis Bank said. “It also includes a onetime impact driven by recent regulatory guidelines on Resolution of Stressed Assets,” it added.

The gross addition to the bad loans pile stood at Rs 9,248 crore. The increase in slippages reflected the bank’s decision to recognise stress early and adjust to the new stressed asset framework put out by the Reserve Bank of India in February. In absolute terms, gross NPAs were Rs 34,248.64 crore as on March 31, 2018, up from Rs 21,280.48 crore as on end-March 2017.

Loan slippages for the quarter stood at Rs 16,536 crore, with Rs 13,938 crore from corporate lending