Axis Bank posted a smaller-than-expected drop in quarterly profit on Monday as the country’s third-biggest private sector lender by assets earned more from interest-bearing assets.
Loans grew 14 per cent from a year earlier, driven by retail and small-and-medium enterprise divisions, leading to a 12 per cent rise in net interest income.
The bank’s gross non-performing loans as a percentage of total loans fell to 6.52 per cent in the quarter from 6.77 per cent in the fourth quarter when the bank reported a huge loss. However, it rose to 5.03 per cent from the year-ago quarter.
A record Rs 10.36 lakh crore of non-performing loans in the country’s banking sector at end-March have hobbled lenders largely dependent on corporate clients and have choked new lending to them.
While more than 86 per cent of the bad-loan pile is held by the country’s state-backed lenders, Axis Bank and its bigger rival ICICI Bank account for the biggest chunk among the private-sector lenders.
Axis Bank increased its provisions to Rs 3,338 crore in the quarter, versus Rs 2,342 crore a year-ago to set aside more money to cover bad loans.
The bank’s net profit for the period ended June 30 fell to Rs 701 crore ($102.14 million) from Rs 1,306 crore a year ago, it said.
Analysts had expected a net profit of Rs 556 crore, according to Thomson Reuters.
Axis Bank shares closed 2.9 per cent higher at Rs 569 apiece on the NSE, ahead of release of its earnings.
($1 = Rs 68.63)
© Thomson Reuters 2018