Axis Bank on Tuesday reported first-quarter net profit declined 19% to ₹1,112 crore, from ₹1,370 crore a year earlier, on higher provisioning for possible defaults.
Provisions and contingencies rose to ₹4,416 crore in the quarter from ₹3,815 crore.. The provisions are in excess of the RBI-prescribed norms, the management said. The bank made specific loan loss provisions of ₹3,512 crore (₹2,886 crore).
COVID-19 provision
The private sector lender made incremental provisions aggregating to ₹733 crore towards COVID-19.
“The overall additional provisions held by the bank towards various contingencies together with the standard asset provisions, translate into a standard asset coverage of 1.56% at June 30, 2020. On an aggregated basis, our provision coverage ratio stands at 104% of GNPA at June 30,” it said.
“The extent to which the COVID-19 pandemic will impact the bank’s operations and the asset quality will depend on future developments, which are highly uncertain,” said Amitabh Chaudhry, MD & CEO.
During the quarter, the moratorium amount was 9.7% of the retail book compared with 25-28% in the previous quarter.
Gross and net NPAs eased to 4.72% and 1.23%, respectively, from 4.86% and 1.56% as March 31.
The bank recognised lower slippages of ₹2,218 crore (₹4,798 crore). Net interest income grew 20% to ₹6,985 crore. Fee income contracted 38% from a year earlier to ₹1,651 crore on lower business volumes, the bank said.
