Axis Bank on Tuesday reported a 31.29% YoY drop in profit before tax for the April-June quarter on the higher provisions booked in the current quarter. With the coronavirus pandemic, it is trying to continue its loan recoveries and also to move towards a more conservative mode of accounting.
The bank’s earnings released on Tuesday showed a profit before tax of Rs 1,427.98 crore, against Rs 2,078.18 crore in the same quarter year ago. The bank had also reported a loss of Rs 1,878.91 crore before tax, in its fourth quarter. Net profit after tax for the Q1 FY21 fell 19% to Rs 1,112.17 crore. If the accounting practices were not changed, the bank would have booked a profit after tax of Rs 1,626 crore. Income earned from selling third-party products, fees and commissions fell to Rs 2,586.68 crore, from Rs 3,868.76 crore in the previous year’s quarter.
The Net Interest Income (NII) of the bank grew by 20% YoY to Rs 6,985 crore from Rs 5,844 crore in the same quarter year ago. Net interest margin at the end of the June quarter stood at 3.40%.  Gross Non-Performing Assets (GNPA) of the bank were at 4.72%, compared to 5.25% in the previous year’s quarter and 4.86% in the fourth quarter. The bank had made an incremental provision of Rs 733 crore in the first quarter of the current fiscal year, towards COVID-19.
The bank’s deposits grew at 16% year-on-year basis while advances grew by 17% and credit growth added more than 600 customers about 2% of which was towards project loans and the rest were for working capital or retail loans. Retail loans grew by 16% and accounted for 53% of the net advances. The Bank’s capital adequacy norm stood at 17.29%.

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