Axis Bank Shares Fall As Q1 Results Disappoint

Updated: Monday, July 25, 2016, 15:13 [IST]

The non ending asset quality misery for the larger banking players continues with Axis Bank reporting a poor set of quarterly numbers for the period ending June 30, 2016.

The Bank's net profits dropped 21.4 per cent, as provisioning continued to dent the bank's profitability. The shares of the bank were last trading at Rs 526, down 2.06 per cent over Friday's close.

Axis Bank Shares Fall As Q1 Results Disappoint

The net profit was placed at Rs.1,555.53 crore for the quarter as compared with Rs.1,978.44 crore a year ago. Most analysts had expected the bank to post a near Rs 2,000 crore in net profits.

Decline in profit is "driven by slippages from the watch list, the bank's Gross NPA and Net NPA levels rose to 2.54 percent and 1.08 percent respectively in the first quarter", the bank said in a statement.

Last December, the Reserve Bank of India had asked banks to recognize visibly stressed assets as non-performing assets (NPAs). This has resulted in the assset quality of most banks in the sector worsening. Public sector banks were the largest affected with some even showing near 8-19 per cent, gross non performing assets.

Eagerly watched would not be the asset quality of public sector banks. Among the larger banks, Canara Bank is slated to report its numbers later today. Analysts expect some improvement in the asset quality for public sector banks, given that they have all been reporting large NPAs in the last few quarters.

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