Axis Bank posts first loss at Rs 2188 cr on higher NPAs

Yes Bank’s Net interest income increased 31.4% to Rs2,154.24 crore as against Rs1,639.70 crore last year

Yes Bank’s Net interest income increased 31.4% to Rs2,154.24 crore as against Rs1,639.70 crore last year

Total Operating Income rose 23.97% to Rs 1222.71 crore in the quarter ended March 2018 as against Rs 986.32 crore during the previous quarter ended March 2017.

Non-interest income, earned primarily through the distribution of financial products such as mutual funds, rose 57 per cent to Rs 203 crore.

Even though it is well-capitalised with an overall buffer of over 18 per cent, the bank board has chose to raise up to Dollars 1 billion in core equity, Kapoor said, adding it may consider raising the money by the end of the FY19 if it sees some opportunities for its use.

The company has reported net sales of Rs.14559.85 crores during the period ended March 31, 2018 as compared to Rs.14181.31 crores during the period ended March 31, 2017.

On the asset front, there was an uptick in bad loans with gross non-performing assets (NPAs) rising to 1.25 per cent of gross advances as on March 31, 2018 against 0.51 per cent during the same period last fiscal.

"With this accelerated recognition, we believe the NPA recognition phase of this credit cycle is now almost complete and the focus shifts to resolution", she said.

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Yes Bank reported better-than-estimated earnings for the January-March quarter on Thursday pushing its shares over five per cent higher. The bank's balance sheet grew 15 per cent and stood at Rs 691,330 crore as on March 31, 2018. This included fee income of Rs 151 crore given to other lenders as priority sector lending certificates (PSLC) to help meet their PSL norms.

Speaking about how FY19 will play out, Sridharan said, "The new NPA formation will reduce significantly". Advances grew 18 per cent to Rs 439,650 crore. For the full year 2017-18, the bank's net profit fell by 92.5% to Rs 275 crore as against a profit of Rs 3,678 crore a year ago.

It was successful to increase its provision coverage ratio by 5 percentage points in a single quarter to 58 and exuded confidence of breaching the 60-percent mark in the next six months. In an interaction with the reporters Sharma said, "Credit risk area was a disappointment for the bank".

Sharma's term as the CEO will come to an end in December this year.

"The bank was nearing an end to the recognition process of bad loans", she added on the bank's poor performance. It reached a day's high of Rs 500.35 on BSE and the day's bottom of Rs 484.65 before closing down 0.77 per cent at Rs 494.55 on BSE.

At this target price, Axis Bank stock would trade at 2.2 times book and 14 times March 2020E EPS for RoEs in the range of 13-14 per cent.

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