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 back in the black as fee collections ramp up and ₹10,000 crore in fund raising cushions the balance sheet
Axis Bank announces second quarter earningsBCCL
  • 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.
Axis Bank’s profit is in the green again after reporting a dip of 19% last quarter. Between July and September, net profit was at ₹1,683 crore. This is also an increase compared to same quarter last year, when the bank registered a net loss of ₹112 crore.

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.
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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 ratioSeptember 2020June 2020
GNPA4.18%4.72%
NNPA0.98%1.23%

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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).

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The 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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