Axis Bank asset quality stabilized

It net profit for Q3FY20 rose 5% (YoY) at Rs.1757 crore; in Q2 it had reported a loss of Rs.112 due to a one-time impact on account of tax. NII rose 15% at Rs.6453 crore.

Operating profit for Q3FY20 stood at Rs.5,743 crore and after adjusting for a previously disclosed one-off recovery of Rs.800 crore in previous Q3, Operating Profit grew 22% (YoY).

Specific loan loss provisions were down 12%. Slippages from the loan book were at Rs.5,124 crore and in addition, slippages from the Investment book were at Rs.1,090 crore, largely from one Housing Finance Company account.

Gross corporate slippages for the quarter (including investment portfolio) stood at Rs.3,891 crores, of which 81% came from clients previously rated BB and below. Outstanding BB & Below corporate loans declined by 18% (QoQ) to Rs.5,128 crore.

Bank’s Gross NPA and Net NPA levels were 5.00% and 2.09% respectively, as against 5.03% and 1.99% respectively (QoQ).  

As on 31 st December 2019, the Bank has additional provisions of Rs.2,558 crores towards various risk contingencies, over and above the regular NPA provisioning and the 0.4% standard assets provisioning requirement. These Rs.2,558 crores of provisions are not counted towards Provision Coverage Ratio calculations of the Bank.

The market is happy with the performance; the stock which had closed yesterday at Rs.712.75, opened higher today at Rs.722 and went on to hit an intraday high at Rs.737.30.