Axis Bank on Wednesday reported its September quarter net at Rs 1,849 crore at a consolidated level against a loss of Rs 18 crore in the year-ago period despite setting aside a high quantum of money for potential reverses in loans.
On a standalone level, the third largest private sector lender had a post-tax net of Rs 1,682.67 crore as against a loss of Rs 112.08 crore in the year-ago period.
The bank's total income (standalone) rose marginally to Rs 19,870.07 crore in the second quarter of 2020-21, from Rs 19,333.57 crore in the same period last year, a BSE filing said.
During the reporting quarter, it downgraded over Rs 4,000 crore of assets into "BB and below" taking the total quantum of such assets to over Rs 14,800 crore, and attributed three-fourths of the additions to estimated restructuring and the rest to internal reviews.
Total provisions carried for the low-rated book is over Rs 2,600 crore.
The bank's chief executive and managing director Amitabh Chaudhry, however, said it has only received "negligible" amount of requests for loan restructuring under the new scheme formulated by the RBI and asserted that there has not been any restructuring.
He added that borrowers have time till December 31 to make the recast requests. During the moratorium period, the bank had not admitted all the requests.
It has set aside an additional provisioning of Rs 3,143 crore during the September quarter, and the size of the buffer beyond the mandatory provisions now stands at Rs 10,839 crore.
The overall provisions during the quarter stood at Rs 4,580 crore as against Rs 3,518 crore in the year-ago period.
Chaudhry said for the last seven quarters since he took over, it has been adopting a prudent and conservative approach and wants to be seen as being ahead of the curve.
At the end of the moratorium period in August, it had Rs 13,948 crore of advances where asset classification benefit was extended, the bank said.
Overall slippages stood at Rs 931 crore for the reporting quarter and the same would have been higher by Rs 648 crore if not for the benefit extended under the Supreme Court directions on asset classification, its chief financial officer Puneet Sharma said.
The gross non-performing assets ratio stood at 4.18 per cent, which would have been higher by around 0.10 per cent if not for the apex court mandate, as against 4.72 per cent as of the end of June quarter.
The core net interest income grew 20 per cent to Rs 7,326 crore, on the back of a 14 per cent increase in advances and a 0.07 per cent expansion in overall net interest margin to 3.58 per cent.
The other income was a shade lower than the year-ago period at Rs 3,807 crore.
The advances growth was driven by corporate loans, which grew 22 per cent, while the retail segment grew 14 per cent. The corporate loans segment was driven by the long term repo window and if not for that, it would have grown by 12 per cent.
The bank will be very keen to grow on the corporate, secured retail and small businesses segment, and will be more cautious about the unsecured retail portfolio, the management said.
Chaudhry said domestic economic activity has improved and stabilised as seen in key indicators, GST, mobility, services PMI broader recovery in non-contact segment underway and the bank is "cautiously optimistic".
"There are going to be few challenges for the sector related to surplus liquidity, muted loan growth and general risk aversion and asset quality but the situation has improved in the last quarter and hopefully the trend continues," he said.
From a capital perspective, its overall adequacy came at 18.92 per cent, courtesy a Rs 10,000-crore fund raise during the reporting quarter done to take care of asset quality troubles.
Among the subsidiaries, the asset management company's net tripled to Rs 92 crore in the first half and securities arm reported a net of Rs 74 crore for the same period which was three times higher than what it had reported in the entire FY20.
The bank scrip closed 0.71 per cent down at Rs 504.85 apiece on BSE, against 1.48 per cent correction on the benchmark index Sensex.