Despite losses in Q4, Axis Bank shares gain value

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Mumbai, Apr 26 Midsize private sector lender Yes Bank today reported a 29 per cent surge in March quarter net at Rs 1,179 crore bolstered by high loan growth and a dip in dud loans which boosted its core interest income.

The bank saw its provisions and contingencies spiking almost three-fold to Rs 7,179.53 crore in the fourth quarter against Rs 2,581.25 crore past year. The bank had however registered a net profit of Rs 1,225.10 crore in the same quarter of 2016-17.

For the March quarter, Axis Bank's loans grew 18 per cent, driven by a 23 per cent rise in loans to retail customers.

Despite the bank reporting net loss for the quarter ended March 2018 and a stressed loan book, shares of Axis Bank are up sharply in positive territory this afternoon.

The microlender-turned-bank, however, saw a 200 per cent rise in provisions as gross non-performing assets ratio rose from 0.51 per cent of assets to 1.25 per cent.

In absolute value, gross NPAs stood at Rs 373.14 crore compared with Rs 86.26 crore.

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During the year ended March 31, 2018, the bank had successfully raised capital of Rs 3,662 crore through initial public offer by issuing 97,663,910 equity shares. Net NPAs increased to 0.58 per cent (Rs 172.90 crore) of net advances by the end of March 2018, versus 0.36 per cent (Rs 61.17 crore).

The Chief Financial Officer of the bank, Sunil Samdani said margins changed because of the change in its loan mix of micro and non-microcredit (86:14). Most of the corporate slippages, nearly 90 per cent came from the BB book particularly the power sector The watch list is now closed and in Q4 it is (just) Rs 428 crore...

On its exposure to the troubled Fortis Healthcare, Kapoor said the total due is over Rs 1,500 crore and has been classified as "standard" in its books and added it has sufficient securities to cover the exposure. In an interaction with the reporters Sharma said, "Credit risk area was a disappointment for the bank".

As per Ghosh, the bank is targeting to "minimise" its bad loans ratio and relying more on tracking the daily on-time repayment rate (OTR) to achieve the goal and deploying more field force.

The result marks a troubled year for the bank especially after its CEO, Shikha Sharma announced that she will step down in December-end this year. The stock was the biggest gainer on both Sensex and Nifty.

The Axis Bank share price rallied as much as 5.5 per cent to Rs 522 on the BSE.