Axis Bank GDR Falls Post Q1 Results As Asset Quality Worsens, Provisions Rise

The Global Depositary Receipts of Axis Bank Ltd. sank 4.8% to trade at $64.3 on Thursday after the bank's asset quality worsened during the June quarter.

As per the Q1 results declared by the private lender, its gross non-performing ratio rose to 1.57% as of June-end from 1.28% a quarter ago. Net NPA also rose to 0.45% from 0.33% in the March quarter.

The prudent application of technical parameters for recognising slippages and consequent upgrades impacted reported asset quality parameters, including provisions and contingencies for the quarter, the bank said in a press release.

The technical impact on profit was Rs 614 crore, return on assets was of 15 basis points and return on equities was 1.4%, it said.

Explaining this technical impact, Chief Financial Officer Puneet Sharma said post the earnings conference call that NPA classification happens on different parameters such as days-past-due criteria.

Gross slippages of the bank rose to Rs 8,200 crore during the quarter, much higher than Rs 4,805 crore in the March quarter.

Of the total, Rs 7,500 crore came from the retail side, Rs 403 crore from the commercial banking segment and Rs 297 crore from the wholesale banking.

The bank's bottom-line fell 4% year-on-year to Rs 5,806.14 crore during the quarter under review. Its lower than the expectations of Rs 6,375.77 crore of the analysts polled by Bloomberg. The bank's bottomline was Rs 7,117.5 crore a quarter ago.

Provisions and contingencies of the bank surged sharply by 94% year-on-year to Rs 3,947.66 crore. It was at Rs 1,359 crore in the prior quarter.

Before the quarterly results were declared, shares of Axis Bank closed 0.63% higher at Rs 1,159.80 apiece on the NSE, against a 0.4% decline in the benchmark index Nifty 50.