Axis Bank was among the top gainers in the Sensex pack during the morning trading session on Friday, a day after the private sector lender announced its first-ever quarterly loss.
On BSE, shares of Axis Bank rose 4.50% or ₹22.25 to trade at ₹516.80at 11:10am. The benchmark Sensex was up 259 points at 34,972. Earlier in the day Axis Bank touched a high of ₹522 and was the top gainer in the Sensex basket.
On Thursday, Axis Bank reported a loss of ₹2,189 crore for the quarter ended March 31 due to a threefold increase in provisions. Gross NPA as on March 31 was 6.77% of the gross advances, widening from 5.04% a year earlier.
Dismal asset quality (multi-fold rise in slippages) took the sheen off of an otherwise operationally steady Q4FY18 (around 18% loan growth and sustained momentum in retail franchise), thereby resulting in a loss,” said Edelweiss Financial Services.
“Critically, slippages were due to up-fronting of stress from the watch-list and BB & below rated exposures as per the RBI’s recent recognition norms. The bank maintained provisioning coverage leading to significantly higher credit cost.
“Major part of stress recognition seems to be over, but recovery is expected to take a while,” it added while revising the target price to ₹535 with a hold rating.
