Axis Bank's Q1 net falls 21% on NPAs

MUMBAI: A sharp rise in provisions for bad loans took a toll on the earnings of Axis Bank for the first quarter of FY17. The bank's net profit fell 21% to Rs 1,555 crore from Rs 1,978 crore in the corresponding quarter last year.
The private bank increased its provisions for bad loans by 88.7% to Rs 2,117 crore. Gross non-performing assets rose to 2.54% from 1.67% in the same period last year.Net NPAs rose from 0.7% to 1.08%. While Axis Bank's asset quality is far better than the loan book of public sector banks and the banking industry, the private lender has a relatively larger exposure to infrastructure and other projects compared to peers such as HDFC Bank and Kotak Bank.
Announcing its results on Friday, the bank said that some stressed loans that had been kept under a 'watch list' in the previous quarter have now slipped into the default category. As a result, the watch list shrunk by 10% from Rs 22,600 crore in the previous quarter to Rs 20,295 crore.
The bank's loan book grew 21% Rs 3,44,925 crore as on June 30. This was driven by a growth in home loans and other retail advances which grew 24% to Rs 1,43,159 crore and accounted for 41% of all loans. Corporate loans, which grew 21% stood at Rs 1,58,155 crore and accounted for 46% of the bank's advances.