Private sector lender Axis Bank on Wednesday reported a 36.4 percent decline in standalone net profit to Rs 1,116.60 crore for the third quarter ended December 2020. It was a mixed performance for the bank. Net interest income (NII) growth is slowest in six quarters and net interest margins (NIM) is the best in 14 quarters.
Reacting to Axis Bank results, Krishnan ASV, Lead Analyst-Banking & Financial Services at HDFC Securities told CNBC-TV18, “There doesn’t seem to be an end to what Axis Bank will provide on the bad book and that’s a bit worrying and that’s feeding into our estimates, forecasts.”
On NPAs, “In the run-up to these earnings, we were expecting nearly 2.1 percent standard asset cover; Axis doesn’t need to use this quarter to launder anymore around provisioning, but unfortunately, they have had to cleanse themselves once again – Rs 4,600-4,900 crore is non-performing asset (NPA) provision that they have made in this quarter.”
“At the end of the day if it’s not accruing to earnings for shareholders then the road to normalisation in credit cost is a bit longer than what we envisaged,” said Krishnan.
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