Axis Bank Q3 net falls 73% to ₹580 cr.

An employee speaks on his mobile phone as he walks inside Axis Bank's corporate headquarters in Mumbai July 17, 2012. Axis Bank, India's third largest private lender, posted a 22.5 percent rise in June quarter net profit, meeting street expectations. REUTERS/Vivek Prakash (INDIA - Tags: BUSINESS)

MUMBAI: The country’s third largest private sector, Axix Bank’s net profit declined 73% to ₹579.57 crore for the quarter ended December 31, as the lender decided to increase the provision coverage ratio.

“Our provision coverage ratio has gone up from 60% to 64%. To increase the PCR by 1%, ₹230 crore need to be set aside,” said Jairam Sridharan, chief financial officer, Axis Bank during the post earnings conference call.

“FY17 will be the peak of stressed assets, we have seen gross slippages declining by 48% sequentially,” Mr. Sridharan said. Fresh slippages during the quarter stood at ₹4,560 crore.

He said about 85% of the corporate loans that has slipped during the quarter were from the watch list.

As on December 31, the bank’s gross NPA and net NPA levels were 5.22% and 2.18% respectively, as against 4.17% and 2.02% respectively as on September 30, 2016, according to the bank.

While net interest income grew only by 4% year-on-year to ₹4,334 crore, other income posted a growth of 45% to ₹3,400 crore, led by gains from treasury operations. Trading profits for the quarter grew 352% to ₹1,525 crore but fee income contracted by 4% to ₹1,805 crore. Net interest margin for period under review was 3.43%.

Mr. Sridharan said due to the demonetisation exercise, its deposit swelled while loan growth slowed down.

YES Bank

Another private sector lender YES Bank’s net profit grew 30.6% growth in its net profit to ₹882.6 crore for the third quarter on the back of 30.3% growth in net interest income to ₹1,507.5 crore. Non-interest income increased by 33.8% y-o-y to ₹998.3 crore in Q3FY17. Its net interest margin expanded 10 bps sequentially to 3.5% for the third quarter.

Federal Bank also announced its third quarter earnings and reported a 26.4% per cent increase in net profit to ₹205.65 crore on the back of 31.6% loan growth. The net interest income for the bank grew by 30.66 per cent to ₹791.4 crore.

The bank’s total deposits increased by 23.32% to ₹92,235.65 crore while savings deposits grew by 32.35% and the share of low-cost deposits improved to 34.66%.