Axis Bank logged a tepid 15% growth in its December quarter net profit at Rs 2,175 crore driven by core income, but the third-largest private lender saw a sharp deterioration in asset quality due to action on large accounts as demanded by the Reserve Bank.
The bank had to recognise over Rs 1,000 crore of assets as bad loans due to action recommended by the RBI, and had to dip into a specially created buffer to show profit, the lender said. It warned that it foresees another Rs 1,300 crore loans turning bad in the ongoing March quarter alone.
"The bank has accounted for the full impact of the re-classification and the resultant provisioning based on RBI's systemic asset quality review of portfolios," Chief Financial Officer Jairam Sridharan told reporters this evening.
"The RBI has done a thorough review of the performance of these accounts across all lenders and they have identified a select list of accounts and said even though these accounts might not be irregular, please go ahead and recognise them as NPAs," he said, adding though the bank was given two quarters to recognise the stress, it did so in a single quarter.
"There is a list of accounts which you need to recognise as NPAs on the books even though on payments, they are not 90 days behind on the due dates.
Axis Bank Q3 net rises 15%, NPAs rise | Latest News & Updates at Daily News & Analysis
The bank had to recognise over Rs 1,000 crore of assets as bad loans due to action recommended by the RBI, and had to dip into a specially created buffer to show profit, the lender said. It warned that it foresees another Rs 1,300 crore loans turning bad in the ongoing March quarter alone.
"The bank has accounted for the full impact of the re-classification and the resultant provisioning based on RBI's systemic asset quality review of portfolios," Chief Financial Officer Jairam Sridharan told reporters this evening.
"The RBI has done a thorough review of the performance of these accounts across all lenders and they have identified a select list of accounts and said even though these accounts might not be irregular, please go ahead and recognise them as NPAs," he said, adding though the bank was given two quarters to recognise the stress, it did so in a single quarter.
"There is a list of accounts which you need to recognise as NPAs on the books even though on payments, they are not 90 days behind on the due dates.
Axis Bank Q3 net rises 15%, NPAs rise | Latest News & Updates at Daily News & Analysis