Shares of Axis Bank slumped as much as 8.4 per cent to hit intraday low of Rs 484.50 after the private sectors lender reported weaker-than-expected earnings in the September quarter.
Axis Bank's net profit in the September quarter fell 83 per cent to Rs 319 crore on net interest income of Rs 11,092 crore. The decline in profit came mainly on account of higher provisioning for bad loans.
Axis Bank said its bad loans jumped to 4.17 per cent of total loans as of end-September from 2.54 per cent in June. About Rs 7,287 crore of loans from the bank's previously announced "watch list" of troubled loans turned non-performing in the second quarter, finance chief Jairam Sridharan told a media conference call on Tuesday.
The banks' record stressed assets are mainly due to corporate loan defaults.
The bank will raise provisions in the second half of the fiscal year, keeping credit costs high for the fiscal year to March, he said. But he saw the current year as the "likely peak" for bad assets. The bank still has Rs 13,789 crore worth of loans in the "watch list".
Axis Bank, the country's third biggest private sector lender by assets, also forecast its full-year credit costs to be roughly around 305 basis points recorded in the first half on an annualised basis. That would be more than double its previous guidance of 125-150 basis points.
Axis Bank shares ended 7.85 per cent lower at Rs 487.55. (With inputs from Reuters)
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