Axis Bank posts Rs 112-crore net loss

Mumbai: Private lender Axis Bank on Tuesday reported a net loss of Rs 112.08 crore in the second quarter ended September 30, 2019 due to one-time adjustment of deferred tax assets as it chose to take the benefit of the reduction in corporate tax rates. The net profit during the same quarter of last year was Rs 790 crore.

The bank’s operating profit grew 45 per cent YoY to Rs 5,952 crore from Rs 4,094 crore in Q2FY19. Profit before tax grew 109 per cent YoY to Rs 2,433 crore as compared to Rs 1,167 crore in the same quarter of last year.

"The one-off impact for the bank, from a DTA (deferred tax assets) perspective, due to a change in corporate tax rate, has been Rs 2,138 crore. It has been fully adjusted through Q2FY20 financials, which has impacted the earnings significantly. Ex of this extraordinary item, profit after tax would have been Rs 2,026 crore, up 157 per cent YoY," Axis Bank said.

The bank’s total income rose to Rs 19,334 crore in Q2 of FY20 from Rs 15,959 crore in Q2 FY19. The net interest income grew by 17 per cent to Rs 6,102 crore from Rs 5,232 crore in Q2 FY19 while net interest margin for Q2 FY20 improved by 11 basis points to 3.5 per cent due an improvement in spread.

Slippages remained
elevated at Rs 4983 crore, of which Rs 2,862 crore of slippages were from the corporate segment while the retail slippages were around Rs 490 crore, while almost equal amount of slippages were from the SME segment. Further 97 per cent of the corporate slippages were from the BB and below rated book. The overall BB & below book has come down to Rs 6,291 crore versus Rs 7,504 crore QoQ, which is a healthy sign. Reduction in BB & below book brought a sense of relief to investors. However, the Bank’s Managing Director and Chief Executive Officer Amitabh Chaudhry during a concall with the media said that the bank remains cautious on the slippages front as the macro environment remains challenging.

Advances growth picked up to 14.4 per cent. Domestic loans grew by 19 per cent and retail loans grew by 23 per cent. Deposits grew by healthy 21.7 per cent and CASA stood at 41 per cent.