For the March quarter, Axis Bank's loans grew 18 per cent, driven by a 23 per cent rise in loans to retail customers.
However, the bank's net interest income (NII) inched-up to Rs 4,730 crore during the quarter from Rs 4,729 crore earned during the corresponding quarter of the previous year. "The bank had to write off Rs 51 crore of advances in FY18 because of the stress", he added.
The bank's Gross Non-Performing Asset and Net Non-Performing Asset levels increased to 6.77% and 3.40%, respectively, as on 31 March 2018, from the preceding quarter. "The NPA recognition phase of this cycle is almost complete".
"There was enough motivation for a kitchen sink, which would have been the best outcome, but reporting a full-year loss possibly weighed down on that decision, and now we believe the balance of Rs 9,000 crore will be classified as non-performing loans (NPL) in the following two quarters", USbased brokerage firm Jefferies said in a note. It had a net profit of Rs 3,679.28 crore in fiscal ended March 2017. This included fee income of Rs 151 crore given to other lenders as priority sector lending certificates (PSLC) to help meet their PSL norms.
The provisions for the quarter jumped substantially by 178 per cent yoy and 155 per cent qoq to Rs. 7,179 crore in Q4FY18 vs Rs. 2,581 crore in Q4FY17.
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Speaking about how FY19 will play out, Sridharan said, "The new NPA formation will reduce significantly". The SME loans grew 19% to Rs 58,740 crore accounting for 13% of the net advances, while the corporate credit led by working capital loans grew 12% to Rs 17,446 crore.
It was successful to increase its provision coverage ratio by 5 percentage points in a single quarter to 58 and exuded confidence of breaching the 60-percent mark in the next six months. The disappointing results have come at a time when the bank is looking for a successor to replace chief executive officer and managing director Shikha Sharma who has sought a shorter term after the Reserve Bank of India (RBI) asked its board to reconsider the fourth three-year term given to her.
The bank reported credit cost of 0.94 per cent for the year and Ahuja exuded confidence that it will improve further going ahead.
The Axis Bank share price rallied as much as 5.5 per cent to Rs 522 on the BSE.
According to the bank, recoveries and upgrades were Rs 3,401 crore while write-offs during the quarter were Rs 3,887 crore.