Higher provisions for bad loans resulted in Q4 loss, says Shikha Sharma
Summary
The regulatory guidelines by the Reserve Bank of India (RBI) has forced the bank to recognise other accounts as bad loans that led to the Q4 loss, said Shikha Sharma, MD and CEO. “We have made provisions for over 65% for all borrowers in bankruptcy court. Large part of power sector slippage has happened in …
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The regulatory guidelines by the Reserve Bank of India (RBI) has forced the bank to recognise other accounts as bad loans that led to the Q4 loss, said Shikha Sharma, MD and CEO.
“We have made provisions for over 65% for all borrowers in bankruptcy court. Large part of power sector slippage has happened in Q4 and outstanding power sector exposure is about Rs 9,000 crore, 40% of that is non-performing,” said the Axis Bank management.
Country’s third largest private sector lender’s gross NPAs during the quarter deteriorated to Rs 34,248. 64 crore, at 6.77% of total loans.
The outgoing CEO of Axis Bank said that bank’s bet on infrastructure haven’t given expected results and that is also one of the reasons for its quarterly loss, “We made some significant bets on the infrastructure which didn’t turned out well.”
Sharma pinned hope on new NPA rules, “The new NPA rules will usher in a much better credit culture. With a functioning bankruptcy law, it makes sense to move forward on recognition and resolution.”
She also added that bank has changed the strategy from project business to high rated business.
Axis Bank on Thursday reported a net loss of Rs 2,188 crore in March quarter against profit of Rs 1,225 crore in the corresponding quarter last year.
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