Mumbai, April 26 (IANS) Lending major Axis Bank on Thursday reported its first net loss since 1998 due to a rise in NPA provisioning.
According to the lender, its net loss stood at Rs 2,189 crore during the fourth quarter (Q4) of 2017-18 from a net profit of Rs 1,225 crore reported for the corresponding period of last fiscal.
"One area where we have been disappointed with our performance has been credit risk. We made some significant bets on the infrastructure sector, which have turned out poorly in this credit cycle," Axis Bank's Managing Director and CEO Shikha Sharma said.
"Consequently, our NPA ratios have risen materially over the last two years. We have been course correcting since as early as 2013, balancing our portfolio mix, strengthening risk management frameworks, focusing on higher rated corporates, and re-orienting the corporate lending business towards working capital loans."
Sharma added: "For the asset quality pain to truly moderate, however, it is critical for us to complete the NPA recognition process, and put the last cycle behind us. Which is what gets us to the bank's results in this quarter."
As on March 31, 2018, the bank's gross NPA and net NPA levels rose to 6.77 per cent and 3.40 per cent from 5.28 per cent and 2.56 per cent as on December 31, 2017 respectively.
"The bank has recognised slippages of Rs 16,536 crore during Q4FY18. This includes an accelerated recognition in the stressed loan book of the bank, particularly in the power sector. It also includes a one-time impact driven by recent regulatory guidelines on Resolution of Stressed Assets," the lender said in a statement.
However, the bank's net interest income (NII) inched-up to Rs 4,730 crore during the quarter from Rs 4,729 crore earned during the corresponding quarter of the previous year.
On a financial year basis, the bank reported that its net profit for the year ended on March 31, 2018 declined by 93 per cent to Rs 276 crore from Rs 3,679 crore for the previous year.
The 2017-18 NII rose by 3 per cent to Rs 18,618 crore from Rs 18,093 crore for the previous year.
