Axis Bank Reports Surprise Loss In Q4 As Provisions Treble

Axis Bank Ltd. reported a surprise loss in the quarter ended March as the private lender increased provisions for bad loans in a virus-struck economy.

The rise in provisions were also due to the bank taking the full 10 percent provisioning impact against accounts which availed the Reserve Bank of India’s moratorium. Banks are allowed to spread the provisioning impact over two quarters, if they choose to do so.

According to Chaudhry, about 10-12 percent of the bank’s borrowers by number have availed the three month repayment moratorium. As far as value of loans is concerned, the moratorium would apply to 25 percent of the bank’s outstanding loan book. About 10 percent of the retail customer base has chosen to apply the moratorium, he added.

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However, March quarter results may not show the full impact of coronavirus-caused disruptions, as per Bloomberg Intelligence. “Fiscal Q4 may only reflect a marginal impact from Covid-19 related headwinds, as India initiated its lockdown in late March,” it had said in a pre-earnings report.

Separately, Axis Bank’s board approved raising of up to Rs 35,000 crore through a mix of debt instruments.

On Tuesday, Axis Bank shares rose 7.07 percent to Rs 457.50 apiece on the NSE while the benchmark Nifty 50 gained 1.06 percent to end the day at 9,380.90 points. The quarterly results were announced after markets closed.