Axis Bank CEO says lending will be 'cautious' despite easing stress from bad loans in the latest fourth quarter

Brochures are seen at a branch of Axis Bank in Mumbai, India, January 22, 2018. REUTERS/Danish Siddiqui
  • Axis Bank reported a net loss of ₹1,387.78 crore in the fourth quarter of financial year ending March 2020.
  • The rise in overall bad loans was a nearly negligible 0.5%.
  • The stock had already run up 7% in anticipation.
Axis Bank reported a net loss of ₹1,387.78 crore in the fourth quarter of financial year ending March 2020 but the rise in overall bad loans was a nearly negligible 0.5%. The stock had already run up nearly 7% in anticipation.

But the management is not taking it light, not yet. " All industries will get impacted sooner or later because of COVID19, We remain conservative in our approach given the heightened risks," Amitabh Chaudhry, CEO of Axis Bank, said. Depositors added 19% to the banks' coffers in the three months that ended with the economy going into lockdown on March 25. On the other hand, the loan book grew 15% compared to a year earlier.

Axis Bank share price

The latest fourth-quarter financial results
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The nearly 20% rise in net income to ₹6,808 crore compared to a year earlier was offset by a rise in provision for bad loans and the net interest margin came in at 3.55% as compared to 3.57% three months ago.

Amidst rising fear of more default by smalller borrowers, the bank said four out of every rupees lent in that segment were secure. Total gross NPA (non-performing assets) at the end of March increased marginally by 0.5% to ₹30,234 crore while net NPA declined 23% to ₹9,360 crore versus ₹12,160 crore, compared to December 2019.

A total of ₹3,920 crore worth loans turned bad in the last three months, compared ₹6,214 crore in the preceding three months, the bank said. And nearly half of those were corporate loans. "Excluding one account of ₹750 crore which got upgraded during the quarter and downgraded again out of total corporate slippages, 84% of this came from previously disclosed BB and below rated clients," the statement said.
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