Axis Bank on Tuesday posted a net loss of Rs 1,387.78 crore for the quarter ended March 31 against a net profit of Rs 1,505.06 crore in the same period last year. Analysts in an ET NOW poll had projected the number at Rs 1,900 crore.
Spike in provisions and contingencies dented the bottomline of the lender. The figure increased by 185 per cent year-on-year (YoY) to Rs 7,730.02 crore during the quarter under review.
However, asset quality of the lender improved with percentage of gross non-performing assets (GNPA) coming in at 4.86 per cent against 5.26 per cent in the previous financial year. The figure stood at 5 per cent in the preceding quarter ended December 31, 2019.
Percentage of net NPAs improved to 1.56 per cent over 2.06 per cent in Q4FY19. The figures stood at 2.09 per cent in the December quarter on FY20. Net interest income grew 19 per cent YoY to Rs 6,808 crore, with net interest margins coming at 3.55 per cent. Operating profit increased 17 per cent YoY to Rs 5,851 crore.
“During the quarter, the bank has made provisions of Rs 7,730 crore, including Rs 3,000 crore related to Covid-19. The overall additional provisions held by the bank towards various contingencies together with the standard asset provisions, translate to a standard asset coverage of 1.3 per cent at March 31, 2020,” Axis Bank said.
Overall, provision coverage ratio (PCR) improved to 69 per cent as of March 31 compared to 60 per cent for Q3FY20 and 62 per cent for Q4FY19. Axis Bank recognised slippages of Rs 3,920 crore during Q4FY20 against Rs 3,012 crore last year. In another update, the Axis Bank’s board has approved to borrow funds in Indian or foreign currency up to an amount of Rs 35,000 crore.
Why author gave example of last year statistics in the first paragraph?
a. To show the quality of the bank
b. To prove his point that markets are down
c. To compare and show the magnitude of loss with rest to last year
d. To prove that the loss happened this year only
Which of the following could be a reason for losses at axis bank?
a. Bank made provisions of Rs 7,730 crore
b. Covid-19 provisions of Rs 3,000 crore
c. Additional provisions held by the bank towards various contingencies
d. All of the above
Which of the following is Positive in the Report, Except?
a. Gross Non-Performing Assets (GNPA) at 4.86 per cent
b. Provision coverage ratio (PCR) 69 per cent
c. Net interest income of Rs 6,808 crore
d. Provisions of Rs 7,730.02 crore