Private sector Axis Bank on Tuesday posted a a 38 per cent rise in September quarter net profit at Rs 432 crore on low base effect despite a spike in the dud loan portfolio due to newer surprises, including an under- reporting found by the Reserve Bank. The third largest private sector lender also warned of more pressure on the asset quality side in the remaining quarter of the fiscal saying the second half will continue to be challenging.
The bank had a net profit of Rs 319 crore in the year-ago period and Rs 1,305 crore in the June 2017 quarter. The bank, which already has highest bad loans among the top three private sector lenders, saw fresh slippages -- assets turning sour -- to the tune of Rs 8,936 crore, including Rs 4,867 crore in ‘divergence’ found by the Reserve Bank on its FY17 provisions treatment. This divergence is over and above the nearly Rs 10,000 crore found and recommended to be treated as NPAs for FY16. Chief financial officer Jairam Sridharan explained that the RBI and the government have been proactive in their approach to dealing with NPAs, wherein efforts are being made for early recognition of dud loans.