Facebook Pixel Code

Jefferies says demonetisation hit Axis Bank’s already weak credit growth

The total stressed assets (4.46% as a percentage of net customer assets) improved on sequential basis (5.46% in Q2FY17).

Jefferies says demonetisation hit Axis Bank’s already weak credit growth

The total stressed assets (4.46% as a percentage of net customer assets) improved on sequential basis (5.46% in Q2FY17). The gross and net NPA ratios rose considerably q-o-q – 5.22% vs 4.17%, and 2.18% vs 2.02% respectively. The provision coverage ratio including technically written-off accounts increased qoq to 64% from 60%.

Demonetisation negatively impacted the already weaker credit growth. Overall advances growth moderated to 10% y-o-y and -1.7% q-o-q in Q3FY17. The retail loan book remained flat sequentially, while SME and large corporate book both decreased sequentially.

This lacklustre credit growth in Q3 led the management to indicate that FY17 credit growth would be lower than earlier guidance of 18%-20% growth. Core PPOP came down 15% y-o-y to R31.1bn, 6.5% below our estimates, with the higher than estimated NII more than offset by higher expenses.

Provisioning was 4.3x of third quarter Q3FY16 provisioning, with annualised credit cost (provision for NPA/net customer assets) for the quarter being 433bps.

If you are keen to know more about Nifty 50 and BSE Sensex levels and seek expert advice on what’s driving the gains and how to build your portfolio, track the latest stock market stats, share market news and top brokerage bets on Financial Express. Download the Financial Express App for the fastest and most reliable business news alerts, key investment strategies and latest movers and shakers from across financial market.

First published on: 21-01-2017 at 03:33 IST
Market Data
Market Data
Today’s Most Popular Stories ×