Axis Bank board clears higher borrowing limit of Rs2 trillion

Axis Bank board clears higher borrowing limit of Rs2 trillion

Axis Bank board clears higher borrowing limit of Rs2 trillion

Axis Bank yesterday reported a loss of Rs 2,189 crore for the three months to March on an over Rs 16,000-crore addition to the bad loan pile, driven majorly by regulatory changes in impaired assets recognition.

For the full year, net profit rose 42.38% to Rs 635.09 crore in the year ended March 2018 as against Rs 446.05 crore during the previous year ended March 2017.

Total income in the January-March period of 2017-18 increased to Rs 1,553.97 crore, up 29 per cent, from Rs 1,207.77 crore in the same quarter of 2016-17.

Despite the bank reporting net loss for the quarter ended March 2018 and a stressed loan book, shares of Axis Bank are up sharply in positive territory this afternoon. Provisions for bad loans jumped to Rs 7,179.53 crore compared to Rs 2,811 crore in the previous quarter. Despite the bank's upfront recognition of stressed assets, "residual pain is still left" and he expects Axis "to return to earnings normalcy" in the year ending March 2020.

Ahuja said capital adequacy stood at 15.33 per cent with the core tier-I capital at 13.61 per cent, which according to him will suffice for at least two years.

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After making mandatory appropriations to Statutory Reserve, Investment Reserve and Capital Reserve, no profits are available for distribution as dividend for the financial year ended 31 March 2018, the bank said while announcing its results.

Speaking to reporters on a conference call, Jairam Sridharan, chief financial officer at Axis Bank, said, "It's our only quarterly loss to date".

The bank, however, asserted that the asset quality recognition cycle was nearing an end after it significantly accelerated NPA recognition in the fourth quarter.

Total advances rose 37 percent YoY at Rs 32,339 crore, of which 86 percent was towards microcredit and the rest included small businesses, housing, loan against property and personal loans.

The bank reported credit cost of 0.94 per cent for the year and Ahuja exuded confidence that it will improve further going ahead. The bank has retained provision coverage ratio at a healthy 65 per cent. Sharma will now leave Axis Bank in December 2018. In December 2017, there were reports of alleged WhatsApp "leaks" of price-sensitive earning data, which the Securities and Exchange Board of India (Sebi) ordered a probe into. The stock was the biggest gainer on both Sensex and Nifty. Despite opening the day on a sluggish note, the stock bounced back within minutes and surged 5.55 per cent to Rs 522 on BSE.

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