Private lender Axis Bank has received Rs 3,004 crore for loan repurchase requests under the COVID resolution framework, of which Rs 623 crore has so far been in force, a conference call after the top management announced Q4 financial results on April 27 I said
Out of the Rs 3,004 crore requests received, the debt restructuring has been done for a loan of Rs 1,848 crore, of which Rs 623 crore has been implemented in Q4. The bank restructured a loan of Rs 845 crore by 31 March, including loans under the MSME Debt Restructuring Scheme.
Debt restructuring means relaxing the repayment terms of the borrower. This may include decreasing the interest rate or extending the repayment period. Last year, the Reserve Bank of India (RBI) allowed banks to restructure loans to help borrowers due to the COVID-19 effect. In addition, there is a separate debt restructuring scheme for MSME loans.
Axis Bank CEO Puneet Sharma said that the bank will decide within 30 June on the loan balance for the restructuring. The bank expects the COVID-19 second wave to have some near-term impact, but will seek growth opportunities in both the safe and unsecured book, management said.
Consolidate debt growth
Retail loans grew 10 percent on a year-on-year basis and 7 percent on a quarter-on-quarter basis (Q-O-Q) and accounted for 54 percent of the bank’s net advances. Domestic retail lending grew by 11% YOY and 7 percent on a quarterly basis.
Within the loan book, the share of secured loans was 81
The percentage includes 36 percent of the retail book with a home loan. Retail disbursement touched an all-new high due to the high contribution of the secured lending sectors. The bank said disbursement was in the consumer segment with 45 per cent YOY and 44 per cent Q-O-Q, with home loans 73 per cent YOY and 45 per cent secured segments such as Q-O-Q.
Typically, banks have reversed the risk because the epidemic has affected the loan repayment capacity of borrowers. Banks are now focusing more on retail lending than on risky corporate lending.
Also read : HDFC AMC Q4 PAT up 27% at Rs 316 crore
Asset quality improves
Axis Bank has seen improvement in asset quality front. Gross non-performing assets (GNPA) as a percentage of gross advances increased to 3.70 percent by March 2021 from 3.44 percent by December 2020. Net NPA also rose to 1.05 percent from 0.75 percent in the same period.
Axis Bank has aggressively provided for potential losses due to COVID. It has made a cumulative provision of Rs 12,010 crore at the end of Q4FY21. “It is pertinent to note that this is over and above the NPA provision included in our PCR calculations. These cumulative provisions change to standard asset coverage of 1.95 percent as of March 31, 2021. Overall, our provision coverage ratio is equal to 120 percent of GNPA as of March 31, 2021.
During the quarter, the bank posted a net profit of Rs 2,677 crore for the quarter ended March 2021 following a sharp decline in bad loan provisions, which estimated CNBC-TV18’s estimate to be Rs 2,175.1 crore for the quarter. Gone. The bank had a loss of Rs 1,387.8 crore in the year-ago period. Double-digit growth in net interest income, non-interest income and pre-provision operating profit also boosted profitability.
The difference between net interest income, interest earned and interest, rose 11% to Rs 7,555 crore in Q4FY21, compared to Rs 6,807.7 crore in Q4FY20, expanding 1 basis point YoY to 3.56 percent at the end of March 2021. .