Banking giant Axis Bank tumbles resulting in decline in BSE Sensex

Axis Bank’s net profit has dropped 83 per cent to Rs 319 crore in Q2FY17 as compared to same period in previous financial year. The bank’s profitability has eroded due to five-fold increase in provisioning to Rs 3623 crore in Q2FY17 from Rs 707 crore in Q2FY16.

The asset quality has worsened further as its gross non-performing assets have rise nalmost four-fold to Rs 16379 crore in Q2FY17 on a yearly basis. The bank’s Gross NPAs are now 4.17 per cent of gross advances as compared to 1.38 per cent a year ago. Its Net NPA levels stand at 2.02 per cent in Q2FY17 against 1.08 per cent in Q1FY17.

Axis Bank has declared its watch list of Rs 22600 crore in beginning of FY17. As per the bank’s management, slippages from the watch list might be higher than the 60 per cent originally envisaged. The bank believes a materially higher proportion of the watch list could turn into NPA by end of FY18. Its watch list has now reduced by 39 per cent since its inception.

The share price of Axis Bank has declined by 7.76 per cent on bourses in early trades; and is trading at Rs 488 on an intraday basis.

The bank’s losses with 41.05 points have contributed to BSE Sensex’s 75.09 points overall loss. BSE Sensex has declined by 0.82 per cent and is trading at 27861.55 on an intraday basis.