The bank reported a net profit of <span class='webrupee'>₹</span>2,677 crore in the three months to March 2021, compared with a loss of <span class='webrupee'>₹</span>1,388 crore in the same period last year.(Bloomberg)
The bank reported a net profit of 2,677 crore in the three months to March 2021, compared with a loss of 1,388 crore in the same period last year.(Bloomberg)

Axis Bank warns of slowing collections in coming weeks

Axis Bank’s advances including targeted long-term repo operations (TLTRO) investments grew 12% year-on-year (y-o-y) to 6.41 lakh crore. Its deposits rose 10.5% y-o-y to 7.07 lakh crore.
By Shayan Ghosh, Mumbai
PUBLISHED ON APR 28, 2021 12:13 AM IST

Private sector lender Axis Bank Ltd expects collections to slow in the coming weeks as Covid-19 cases continue to rise across India, affecting the movement of executives on the ground, its chief executive officer Amitabh Chaudhry said on Tuesday. “These are early days, but we do see an immediate business impact across segments,” said Chaudhry.

He said corporates are adopting a wait-and-watch strategy and given the sudden surge, the focus is on employee health.

Axis Bank’s advances including targeted long-term repo operations (TLTRO) investments grew 12% year-on-year (y-o-y) to 6.41 lakh crore. Its deposits rose 10.5% y-o-y to 7.07 lakh crore.

“We have not seen any slowdown in early bucket collections, but it is likely to get impacted in the coming weeks because people are not able to meet customers,” Chaudhry said, adding that despite challenges, such situations do provide opportunities and the bank would like to grow in its focus segments.

The bank reported a net profit of 2,677 crore in the three months to March 2021, compared with a loss of 1,388 crore in the same period last year. What changed this time round was the significantly lower provisions of 3,295 crore in the quarter. This, despite the fact that Axis Bank has changed its provisioning norms for small business loans, setting aside more than regulatory requirements. This contributed an additional 803 crore to provisions in the quarter.

“Our balance sheet is strong, and we have taken provisions upfront and have more than decent buffers built in,” said Chaudhry, speaking about the lender’s resilience to the second Covid wave.

He added the bank has a formalised and calibrated provisioning policy and depending upon how the portfolio across the franchise behaves, provisioning will change. “We don’t know how Covid will play out. Depending on that, our provisioning policy will take care of it,” he said.

It reported gross slippages of 5,285 crore during the March quarter, versus 3,920 crore in the same period last year.

Shares of Axis Bank on BSE closed at 699.3 on Tuesday, down 0.16%.

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