Domestic loan book grew 19 per cent YoY, retail book by 23 per cent and domestic corporate loans grew 18 per cent. Fee income grew 11 per cent, led by retail fees, which grew 16 per cent. Total deposits on quarterly average basis grew 23 per cent, and the bank raised equity capital of Rs 12,500 crore through a qualified institutional placement to enhance its capital adequacy position. Under Basel III, the capital adequacy ratio (CAR) and Tier I CAR stood at 18.45 per cent and 15.25 per cent, respectively.
Kajal Gandhi, vice-president (Research) at ICICI Securities, said: “The operational numbers are looking good and the asset quality is also reasonable. I don’t think the street will react negatively to these set of numbers. Street can react in a neutral to positive manner.”
The gross and net non-performing assets book fell for the sixth straight quarter. GNPA and NNPA ratios were 5.03 per cent and 1.99 per cent, compared to 5.25 per cent and 2.04 per cent in the first quarter. GNPA and NNPA for the Q2FY19 were at 5.96 per cent and 2.54 per cent, respectively. Gross corporate slippages for the quarter stood at Rs 2,862 crore, of which 97 per cet came from BB and below rated clients (loan and investment exposures). The bank also holds Rs 2,600 crore of provisions towards various contingencies
Commenting on the slippages, Axis Bank
Managing Director Amitabh Chaudhry said, “We have recognised that we need to work in some areas. The bank slippage numbers have remained elevated in this quarter reflecting the situation in corporate lending. Almost all our slippages came from previously disclosed BB and below-rated clients.”
He said: “We have a residual stock of stress built up over the years. While slippages continue to come from this stock the current macro environment is not enabling a quick rundown of the pool. We expect the slippages to remain elevated from this stock. There are some examples were slippages from this stock are likely to be recovered in the next quarter.”
Regarding retail loan, Chaudhry said, “Consumer debt levels have gone up marginally in recent years but remains significantly below developing country averages in almost every product category.”
On the liquidity crisis in the non-banking financial sector, Chaudhry clarified in the small and medium business segments, there are some sign of stress due to delayed payments. We need to remain cautious as the funding issues in NBFCs could have a bearing on this segment too, he said.