India's Axis Bank posts surprise Q4 loss

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Net losses for the March quarter of financial year 2018 came in at Rs 2,188.74 crore due to higher provisioning for bad loans.

Axis's CEO Sharma will step down at the end of 2018, more than two years before the proposed end of her term, after the regulator reportedly question the lender's performance. "It also includes a one-time impact driven by recent regulatory guidelines on Resolution of Stressed Assets", the lender said in a statement.

Net interest income (NII) grew 25.2 per cent to Rs 863 crore during the quarter from Rs 689 crore in the same quarter a year earlier. In an interaction with the reporters Sharma said, "Credit risk area was a disappointment for the bank". Provisions rose to Rs 71.8 billion in the quarter that ended in March from 28.1 billion the previous quarter as an earning of Rs 165 billion of new defaults were identified after the implementation of stringent regulations, the bank said in an exchange filing on Thursday.

On asset front, the gross non-performing assets (NPAs) stood at 6.77 per cent of the gross advances by end of March 2018 as against 5.04 per cent in year-ago period.

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During the year ended March 31, 2018, the bank had successfully raised capital of Rs 3,662 crore through initial public offer by issuing 97,663,910 equity shares. The lender's so-called watchlist shrank to 0.1% of its total loan book from 1.3% the previous quarter and 2.5 percent the previous financial year. The bank's watch-list fell 92 percent and stood at Rs 428 crore during the quarter. Credit cost will normalise.

As per Ghosh, the bank is targeting to "minimise" its bad loans ratio and relying more on tracking the daily on-time repayment rate (OTR) to achieve the goal and deploying more field force.

SHARES of Axis Bank on Friday rose almost 6 per cent even as the company reported a net loss of Rs 2,188.74 crore for the quarter ended March 31, 2018. The divergence between what the bank reported and what the RBI auditors found were to the tune of Rs 4,867 crore in 2016-17 and Rs 9,478 crore for 2015-16. "The bank expects to grow its loans in high teens to 20 per cent. Margins are expected to be steady next year, RoE is expected to be around 18 per cent".

According to the bank, recoveries and upgrades were Rs 3,401 crore while write-offs during the quarter were Rs 3,887 crore. The stock ended at Rs 539 on BSE, up 8.98 per cent.