Axis Bank is back in the black as fee collections ramp up and ₹10,000 crore in fund raising cushions the balance sheet
- Axis Bank is profitable again as it posts a net profit of ₹1,683 crore after a dip of 19% last year.
- Credit growth was lower than expected at 6%.
- The bank’s fund raising of ₹10,000 crore went towards additional provisions.
The bank’s net interest income also showed growth of around 20% in the second quarter as compared to the same time period last year.
More importantly, collection of fees showed considerable improvement standing at ₹2,752 crore — growing 67% over the first quarter and 4% over last year. According to the bank, the key driver for fee income growth for retail fees, which — in itself — grew by 82% over the last three months.
Loan growth, however, was underwhelming, increasing by only 6%. Most analysts expected at least 10% in credit growth.
Axis Bank’s ₹10,000 crore in fund raising put towards provisions
At the end of September, Axis Bank’s gross non-performing assets (GNPA) and net non-performing assets (NNPA) were at 4.18% and 0.98% respectively.
|NPA ratio||September 2020||June 2020|
The bank has not recognised any non-performing assets (NPAs) since August 31, adhering to the Supreme Court's order. If not for that, its GNPA would have been 4.28% and NNPA would have been 1.03%.
Axis Bank has made incremental provisions of ₹1,279 crore towards loans under moratorium and ₹ 1,864 crore towards probable restructuring, aggregating to ₹ 3,143 crore.
It has another ₹10,839 crore in aggregated additional provisions which comes from the funds it raised through allotment of equity shares to qualified institutional buyers (QIB).
AdvertisementThe fund raising also led to the paid-up share capital of the Axis Bank increasing by ₹47 .61 crore and the reserves of the bank increasing by ₹9 ,915.37 crores after charging off issue related expenses.
On an aggregated basis, provision coverage ratio — which includes specific, standard, additional and COVID-19 provisions — stands at 124% of GNPA at the end of September.
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