Private sector lender Axis Bank on Tuesday reported a 19 per cent year-on-year (YoY) decline in its net profit at Rs 1,112 crore for the first quarter ended June 30, 2020, dented by sharp decline in other income. The lender had posted net profit of Rs 1,370 crore in the same quarter last year, Axis Bank said in a regulatory filing.
The bank's net interest income (NII), the difference between interest earned and interest expended, rose 20 per cent YoY to Rs 6,985 crore during Q1FY21 from Rs 5,844 crore in Q1FY20. Net interest margin during the quarter under review stood at 3.40 per cent.
Non-Interest Income (comprising of fee, trading profit and miscellaneous income) declined by 33 per cent YoY to Rs 2,587 crore during Q1FY21. Fee income de-grew 38 per cent YoY to Rs 1,651 crore due to lower business volumes and velocity of throughput of transactions. Miscellaneous income for the quarter stood at Rs 313 crore as compared to Rs 373 crore in Q1FY20.
The bank's operating profit for the April-June quarter was Rs 5,844 crore, down 1 per cent YoY from Rs 5,893 crore in Q1FY20.
Commenting on Q1 earnings, Amitabh Chaudhry, MD & CEO, Axis Bank said, "The disruption caused by the pandemic has led to immense economic and social impediments, however, it has also brought about innovations across the industry. Axis Bank has been in the forefront, working with all its stakeholders to constantly come up with new solutions that strengthen the institution and support customers, employees and partners through this challenging phase."
Provisions and contingencies increased by 15.8 per cent YoY to Rs 4,416.42 crore at the end of June quarter 2020. The figures were lower by 42.9 per cent compared to Rs 7,730 crore in March quarter.
Specific loan loss provisions for Q1FY21 stood at Rs 3,512 crore compared with Rs 2,886 crore in Q1 last year and Rs 4,204 crore in Q4FY20. "The bank held additional provisions of around Rs 5,983 crores towards various contingencies at the end of Q4FY20. It has made incremental provisions aggregating Rs 733 crore in Q1FY21 towards COVID-19," Axis Bank said.
The bank reported total slippages of Rs 2,218 crore in Q1FY21, compared to Rs 3,920 crore in Q4FY20 and Rs 4,798 crore in Q1FY20. Slippages from the loan book and investment stood at Rs 2,011 crore and Rs 207 crore, respectively. Corporate slippages was at Rs 1,355 crore and recoveries and upgrades from non-performing assets (NPAs) during the quarter were Rs 608 crore while write-offs were at Rs 2,284 crore, the bank said.
On asset quality front, gross non-performing assets (NPAs) ratio as a percentage of gross advances declined to 4.72 per cent from 5.25 per cent in Q1FY20. The net NPA ratio declined to 1.23 per cent in Q1FY21, against 2.04 per cent in the year-ago quarter.
In absolute terms, Axis Bank's Gross NPA stood at Rs 29,560 crore and Net NPA stood at Rs 7,448 crore as on June 30, 2020. The provision coverage, as a proportion of Gross NPAs, stood at 75 per cent.
Ahead of Q1 earnings announcement, shares of Axis Bank closed trade at Rs 446.20 apiece, up 2.86 per cent, against previous closing price of Rs 433.80 on the BSE.