MUMBAI: Private sector lender Axis Bank’s net profit plunged 46 per cent at Rs 701 crore for the quarter ended June, 2018 as against Rs 1,306 crore in the corresponding period a year ago. However, on a sequential basis, the bank has turned the corner compared to a net loss of Rs 2,189 crore—it’s first-ever loss since the bank’s listing—during the quarter ended March, 2018. “There are signs of bank credit growth, which will translate into pricing power for banks,” said Shikha Sharma, MD & CEO, Axis Bank.
Speaking to media after the results announcement, she reasoned that investment demand was improving, auto sales were indicating a recovery, large corporate were finalizing capex plans and retail and services demand will remain strong - indicating a 12-13 per cent growth in credit growth. Net interest income rose 11.92 per cent over last year at Rs 5,167 crore during the June quarter, as against Rs 4,616 crore in the corresponding quarter last year.
Provisions increased 42.51 per cent over the previous year to Rs 3,337 crore compared to Rs 2,342 crore last year. But on a quarter-on-quarter basis, they fell 53 per cent to Rs 3,338 crore from Rs 7,179 crore. Further that bank said elevated NPA recognition phase was nearly complete. The bank’s asset quality remained stable as most of the stress was recognized and provided for in the previous quarter ended March, 2018. The percentage of gross NPAs stood at 6.52 per cent as against 6.77 per cent on quarter-on-quarter basis, while net NPAs fell to 3.09 per cent from 3.40 per cent on a sequential basis.
“Significant acceleration was driven by the (RBI’s) February, 12 circular, which has now reduced. The NCLT, IBC framework has had material impact on recovery. Asset quality has turned and improved,” Sharma said. Meanwhile, the bank remained tight-lipped on its CEO appointment.