INSUBCONTINENT EXCLUSIVE:
Analysts had on average expected a profit of Rs 514 crore rupees.
India's Axis Bank Ltd reported its first ever quarterly loss on Thursday after a surge in bad
loans, capping a troubled year for the country's third-biggest private sector lender by assets.While the bulk of India's 9.5
trillion-rupee (9.5 lakh crore) soured-loans as of end-2017 were with the country's dominant state-run banks, among the private sector
lenders Axis and its bigger rival ICICI Bank also account for large chunks.Stricter rules enforced by the Reserve Bank of India in February
are set to push the industry's non-performing loans even higher.Axis' net loss was Rs 2,189 crore rupees ($328 million) for the fiscal
fourth quarter to March 31, the Mumbai-based bank, which was founded in 1993, said.The results were a reflection of the bank's desire to
accelerate non-performing asset (NPA) recognition, said Chief Executive Shikha Sharma, who is due to step down at the end of December after
being at the helm for nine years."With this accelerated recognition, we believe the NPA recognition phase of this credit cycle is now nearly
complete and the focus shifts to resolution," she told a news conference at the bank's headquarters.Axis has seen its non-performing loans
jump more than eight times in the past three years to Rs 34,249 crore, or 6.77 per cent of its loan book, at the end of March
In the March quarter alone, it added Rs 16,536 crore in incremental bad loans, which finance chief Jairam Sridharan said was driven by the
recent central bank rule changes.Sridharan predicted net non-performing loans additions in the year to March 2019 will be "significantly
lower" than the previous year, while lending growth will be in the "high teens".For the March quarter, the bank's loans grew 18 per cent,
driven by a 23 per cent rise in loans to retail customers
Its net interest income growth was flat in the quarter, and rose 3 per cent for the full year leading to a net interest margin of 3.44 per
cent.EARLY EXIT FOR CEOLast week, the bank appointed leadership advisory firm Egon Zehnder to help it search for a new chief executive, and
said its board would ensure that the process is completed before Sharma's term ends.Sharma, who had been originally given a three-year
term to begin from June 1, sought to shorten her tenure after the central bank reportedly expressed concerns.Axis Bank has also faced other
problems.A central bank audit last year found more bad loans than the bank had originally reported for the year ended March 2017.In
December, the bank was ordered by India's markets regulator to conduct an internal investigation into a suspected leak of financial
information and to strengthen its handling of such data, after a Reuters report documented messages about company results being circulated
on private WhatsApp groups ahead of official release.The bank has submitted its report on the investigation to the capital markets
regulator, but has yet to hear back, Sharma said on Thursday.Axis Bank's smaller rival Yes Bank, which also reported on Thursday reported
a better-than-expected 29 percent rise in fourth-quarter profit as its bad-loan ratio narrowed.Shares in Axis Bank, valued at about $19
billion, closed 0.9 per cent lower ahead of the results in a Mumbai market that gained 0.5 per cent
The stock is down 12.4 per cent so far this year, underperforming a 2 percent fall in the banking sector index and a 0.8 per cent rise in
edited by staff and is published from a syndicated feed.)
