Private sector lender Axis Bank has reported a ₹112 crore net loss for the quarter ended September 30 on one-time tax impact.
But for this, profit could have grown 157%, the bank said on Tuesday.
“Over the course of the last multiple years as we have made provisions, we have been accumulating a deferred tax asset (DTA)that. That number was ₹7,770 crore at the end of first quarter of the financial year. So, we have been accumulating that at the rate of 35%. But now, with the tax rate reduced to 25%, that entire DTA part of the balance sheet gets re-stated to 25%. That cuts down the asset size of the DTA book and that is ₹2,138 crore which we have taken through the P&L this time,” said Jairam Sridharan, chief financial officer, Axis Bank during a media interaction.
Operating profit for the quarter grew 45% year-on-year to ₹5,952 crore. Net interest income grew 17% to ₹6,102 crore while net interest margin was 3.51%, the highest in last nine quarters.
The gross NPAs of the bank was 5.03% compared with 5.96% a year ago. However, slippages stayed elevated at ₹4,983 crore in the quarter compared with ₹4,798 crore in Q1FY20 and ₹2,777 crore of the same quarter of the previous financial year. Corporate slippages were at ₹2,862 crore. Provision for bad loans stood at ₹2,701 crore, compared with ₹2,686 crore in Q2 last year and ₹2,886 crore in Q1FY20.
“Including provisions for standard assets and other provisions, total provisions stood at ₹3,518 crore,” the bank said.
“We need to improve in couple of areas. The bank’s slippage numbers have remained elevated this quarter,” said Amitabh Chaudhry, MD & CEO of Axis Bank.
“Casa [current and savings account ] is another area we need to do better. We need to improve our Casa growth going forward,” he said. Casa as a percentage of the total deposit fell to 39% for the bank and the plan was to take the share to over 40%.
