Category: Banking & Finance

Sharp drop in provisions helps lender beat profit estimates, BFSI News, ET BFSI

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MUMBAI: Axis Bank today reported a net profit of Rs 2,677 crore for the quarter ended March as against a net loss of Rs 1,387.8 crore in the year-ago quarter. The lender’s net profit was higher than even the most optimistic of analysts’ estimates.

The bank’s net interest income in the quarter jumped 11 per cent year-on-year (YoY) to Rs 7,555 crore, which was largely in-line with analysts’ estimates.

The bank reported a strong growth of 12 per cent on-year in its loan book, which was higher than analysts’ estimates of 7-9 per cent growth.

The bank reported a strong growth of 12 per cent on-year in its loan book, which was higher than analysts’ estimates of 7-9 per cent growth. The growth in loan was led by corporate loans, which grew 16 per cent on-year, whereas retail loans rose 11 per cent in the reported quarter.

The lender’s asset quality also showed improvement during the quarter as net non-performing assets ratio fell 14 basis points sequentially to 1.05 per cent. For the quarter, the lender’s specific loan-loss provisions were at Rs 7,038 crore as against Rs 4,204 crore in the year-ago quarter.


During the quarter, the Axis Bank made additional provisions of Rs 803 crore on account of change in NPA provision rates on loans to the commercial banking segment, the lender said. The lender’s credit cost also came down sharply to 1.21 per cent for the quarter as against 2.77 per cent a year ago.

The bank said that its overall capital adequacy ratio stood at 19.12 per cent including the Common Equity Tier I ratio of 15.4 per cent. It said that COVID-related provisions of Rs 5,012 crore provided an additional cushion of 69 basis points.

Axis Bank’s operating performance was strong as operating profit jumped 17 per cent year-on-year to Rs 6,865 crore in the reported quarter.

The lender’s top line was affected by a strong quarter for the non-interest bearing functions. Fee income in the quarter grew 15 per cent on-year to Rs 3,376 crore, which helped non-interest income rise 17 per cent on-year to Rs 4,668 crore.

For the financial year, the lender’s net profit more than quadrupled to Rs 6,588 crore, while its net interest income rose 16 per cent to Rs 29,239 crore.

Shares of Axis Bank ended 0.1 per cent higher at Rs 700.9 on the National Stock Exchange.



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India to begin phase 3 vaccine strategy from May 1

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India will commence its more liberalised phase-3 vaccination programme from May 1, making those above 18 years of age eligible for the anti-Covid shots.

The registration for phase 3-vaccination will commence on CoWIN, the digital platform that is tracking each and every vaccination carried out in the country.

These are the steps that need to be followed for getting registered for the vaccination: The beneficiary will have to visit the website www.cowin.gov.in and register his or her name by entering the name and mobile number. Once the mobile number is given, an OTP will be sent to the number, which required to be provided for completing the registration. Subsequently, the beneficiary must fill in the details of any of the eight different photo ID proofs mandated by the government. They include Aadhaar card, driving licence, PAN card, passport, voter card, and pension book, among others. Once these details are provided, the beneficiary will be able to schedule the vaccination at a place and time of convenience.

Currently there are two vaccines that are being given to beneficiaries – Covaxin and Covishield – and both require two doses for completing the vaccination course. While two doses of Covaxin are given 4 to 6 weeks apart, the gap between two Covishield doses could be 4 to 8 weeks. Many beneficiaries receiving the shot may develop mild symptoms such as fever, body pain and tiredness.

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Lockdown isn’t a solution, people should observe self-restrictions: Gujarat HC

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With new Covid cases continuing to scale new highs in Gujarat and the government refraining from pronouncing a lockdown, the Gujarat High Court, on Tuesday, said it is the will of the people whether or not to break the chain of infections.

Even as different State governments in Maharashtra, Delhi and Karnataka have gone for a lockdown, the Gujarat government has repeatedly ruled out the idea of a State-wide lockdown.

Hearing a suo-motu public interest litigation (PIL) on Covid-19 management in Gujarat, the Division Bench of Chief Justice Vikram Nath and Justice Bharvav Karia remarked on Tuesday that lockdown isn’t a solution.

“By imposing a lockdown how many people lose their one-day meal? This is not Germany, New Zealand, (or) London. This is India…People should think of confining themselves to houses and not venturing out without work. Why we can’t have self-restriction on ourselves? Why do you need to depend on government?” the Bench raised questions on the casual public behaviour amid the latest wave.

The Bench remarked that people should observe self-imposed lockdown for a week to break the chain of spread. “The government is not responsible for the spread. We are responsible,” the Bench said, adding that it is the will of the peoplewhether or not to break the chain.

Weekend lockdowns

Notably, several trade associations, including Gujarat Chamber of Commerce and Industry (GCCI), have started observing voluntary weekend lockdowns. Similarly, civic bodies in districts have also appealed to people to adopt voluntary restrictions with reduced business hours. For example, in Vadodara, sanitaryware traders and welding merchants are voluntarily shutting shop after 3 pm daily till May 5. In smaller towns such as Prantij in North Gujarat and Anand in Central Gujarat the business hours have been reduced till 5 pm. Meanwhile, in Himmatnagar town, the civic body has appealed for a local lockdown till May 2, allowing only essential movements between 9 am and 4pm.

On the debate on economics versus healthcare during pandemic, the smaller towns and businesses in Gujarat seem to have struck a balance providing enough opportunity for businesses to operate, while reducing the exposure to each other to prevent spread.

The High Court noted: “People have started realising it (need for voluntary lockdown). (And) We see some self-restrictions being followed by shopkeepers. There is some realisation. Now, if the government takes some more steps, it will bring positive results,” said the High Court.

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HDFC AMC fourth quarter net up 26% on higher income

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Assets under management rose 24 per cent to ₹3.95 lakh crore

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April 27, 2021

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Quarterly Results

HDFC Asset Management Company Ltd



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Axis Bank Q4 net profit surges to Rs 2,677 crore

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Private sector lender Axis Bank reported a sharp rise in its net profit for the quarter ended March 31, 2021 with robust loan growth.

Back in the black, Axis Bank’s net profit stood at Rs 2,677.06 crore in the January to March 2021 quarter as against a net loss of Rs 1,387.78 crore in the same period a year ago. On a sequential basis, its profits grew 140 per cent from Rs 1,116.60 crore in the quarter ended December 31, 2020.

For the full fiscal 2020-21, Axis Bank’s net profit surged 305 per cent to Rs 4,961.28 crore versus Rs 1,627.22 crore in 2019-20.

For the quarter ended March 31, 2021, the private sector lender registered an 11 per cent growth in its net interest income to Rs 7,555 crore from Rs 6,808 crore a year ago. The net interest margin stood at 3.56 per cent in the fourth quarter last fiscal as against 3.55 per cent a year ago.

Other income grew 17.1 per cent to Rs 4,668.3 crore in the quarter under review.

For the fourth quarter of 2020-21, the bank’s provisions fell 57.4 per cent to Rs 3,294.98 crore from Rs 7,730.02 crore a year ago.

“The bank held cumulative provisions (standard + additional other than NPA) of Rs 12,010 crore at the end of the fourth quarter of 2020-21. It is pertinent to note that this is over and above the NPA provisioning included in our PCR calculations,” Axis Bank said in a statement on Tuesday.

Asset quality has improved. Gross non-performing assets stood at Rs 25,314.84 crore as on March 31, 2021 or 3.7 per cent as against 4.86 per cent a year ago. Net NPAs amounted to 1.05 per cent as on March 31, 2021,versus 1.56 per cent a year ago.

The board of directors of the bank have considered it prudent to not propose any dividend for the year ended March 31, 2021, in light of the situation developing around Covid-19 in the country and related uncertainty that it creates, Axis Bank further said.

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‘Q1 is a cautious phase as customers are on wait-and-watch mode’

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The first quarter of the fiscal year 2021-22 will be a cautious phase with customers on a wait-and-watch mode amid localised lockdowns and surging Covid-19 cases, believes Ramesh Iyer, Vice-Chairman and Managing Director, Mahindra Finance.

“Customers have money but they want to wait for a month to see how things pan out. Up to mid-May one would be on the wait-and-watch situation and if things were to come under control, there would be a sudden spurt of demand. The pent-up demand will get capitalised. Customers are not averse to buying but they want to wait for some time,” he said.

In an interaction with BusinessLine, Iyer said he expects growth in segments like vehicle sales to revive in coming quarters.

“Going forward, trend will be a growth curve but it may not be the first quarter. At least April and May will not be so. Last one week has been tough. We will have to wait till May 15,” he said, adding that the festival season, post-monsoon, would see a substantial growth potential.

In terms of disbursements, Iyer said Mahindra Finance will focus on areas which are less impacted by Covid infections.

“We have mapped across the country pockets which are least, moderately and severely impacted. So, in the severely impacted pockets, we will focus on collection efficiency and asset quality while the least and moderately impacted ones will be an opportunity for us,” he said.

The NBFC has also added about 150 branches in the last quarter and it is mapped on the basis of new economic activity and agri support in the current scenario.

“We said it even last year that when there are unknowns around, it is better to be cautious and finance people who genuinely want to use the vehicle and not use it as an opportunity. In difficult times, they can’t survive. We need experienced operators,” Iyer said.

However, in terms of collection efficiency, the fourth quarter of 2020-21 was even better than the fourth quarter of 2019-20 for Mahindra Finance. Collection efficiency was at 110 per cent.

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SBI to consider raising $2 billion via bonds, BFSI News, ET BFSI

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NEW DELHI: The country’s largest lender State Bank of India (SBI) on Tuesday said a committee of its central board will consider raising up to USD 2 billion (around Rs 14,942 crore) through bonds in this fiscal year. The Executive Committee of the Central Board is scheduled to have a meeting on April 28, 2021, the bank said in a BSE filing.

The committee will examine “the status and decide on long term fund raising in single / multiple tranches up to USD 2 billion through a public offer and/or private placement of senior unsecured notes in US Dollar or any other convertible currency during FY 2021 – 22”, the filing said.

SBI shares ended at Rs 352.9, up by 2.5 per cent, on BSE.

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FIDC seeks relief measures in wake of second Covid wave

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Concerned about the impact of the second wave of Covid-19 infections, Finance Industry Development Council has sought relief measures including restructuring for retail and individual borrowers of non banking financial companies (NBFCs).

In a representation to Reserve Bank of India Governor Shaktikanta Das, FIDC has asked that borrower accounts, irrespective of whether or not they had been restructured earlier and if they are standard accounts as on March 31, 2021, may be allowed restructuring without any downgrade in asset classification, subject however to the lending NBFCs undertaking fresh credit assessment of the borrowing entity.

“We wish to bring to your kind notice that the second wave of Covid- 19 has already started impacting the industry, more so the above self- employed segment of customers having little or nothing to fall back upon,” FIDC said in the letter.

NBFCs under pressure

It also pointed out that with many states like Maharashtra, Chhattisgarh, Madhya Pradesh, Karnataka, Rajasthan, Tamil Nadu and NCR already under lockdown or lockdown-like strict conditions, which has resulted in closure of NBFC branches. It is becoming increasingly difficult to reach customers for collections as their business has come to standstill and their livelihoods are under threat, it further said.

“It will not be long before the NBFC industry starts reeling under pressure of increased NPAs and at the same time, handling demand of moratorium and/or restructuring from its existing and deserving customers,” FIDC said.

Loan restructuring

It has also asked the RBI to allow standstill on buckets for restructured accounts for the first quarter of the current fiscal.

FIDC has also sought restructuring of loans taken by small NBFCs (having asset size of less than ₹500 crore) from banks and FIs and to avoid ALM mismatch arising out of restructuring of their customers’ accounts.

It has also asked the RBI for liquidity support to small NBFCs for on lending to micro, small and medium enterprises.

“We urge the RBI to increase the overall support outlay to AIFIs from ₹50,000 crore to at least ₹75,000 crore,” FIDC said, adding that benefit of PSL classification for lending by banks to

NBFCs for on-lending may please be regularised as part of the overall PSL policy.

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SBI to recruit 6,344 junior associates

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Here’s some good news for job-seekers in the current pandemic-ravaged times. State Bank of India (SBI) has just announced vacancies for recruiting 6,344 Junior Associates (Customer Support & Sales).

This recruitment drive comes in the backdrop of the possibility of companies slowing hiring due to the adverse impact of Covid-19 on their operations as well as demand for goods & services. So, there is likely to be fierce competition for the vacancies.

Though under the essential academic qualifications, India’s largest bank has prescribed “graduation in any discipline from a recognised University or any equivalent qualification recognised as such by Central Government”, it is likely that many with professional qualifications, including engineering, law, management, among others, will have a shot at the exam.

This time around the number of vacancies, including regular, backlog and special recruitment drive, advertised are about 35 per cent less vis-a-vis last year.

The age criteria for the general candidates to take the exam is “not below 20 years and not above 28 years” as on April 1, 2021. For the other categories, there is relaxation in the upper age limit.

The starting Basic Pay for Junior Associate is now higher at ₹19,900 against ₹13,075 earlier.

This hike in Basic Pay follows the signing of the industry-wide 11th Bipartite Wage settlement in November 2020, whereby bank employees — officers, staff and sub-staff — got a 15 per cent hike in the payslip component.

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As per SBI’s recrutiment advertisement, the total starting emoluments of a Clerical Cadre employee payable in a metro like Mumbai will be around ₹29,000 per month (₹26,000 earlier).

This is inclusive of Dearness Allowance, other allowances at the current rate and two additional increments for newly recruited graduate junior associates. Allowances may vary depending upon the place of posting.

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According to the bank, the new recruits will be on probation for a minimum period of 6 months. They will be required to complete e-lessons during the probation, for getting confirmed in the bank, failing which their probation will be extended till completion of the same.

Further, before the probation period comes to an end, their performance will be evaluated and the probation period of those employees whose performance fails to meet the bank’s expectation, may be extended.

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SBI Cards Q4 spends point to a worsening Covid impact, BFSI News, ET BFSI

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SBI Cards and Payment Services Ltd’s showing a slowdown in business in the fourth quarter, when the new Covid wave was not prominent in India.

The company reported a weak fourth quarter, with a sequential decline in receivables/spending.

The spends

While overall spends rose 11% year on year (YoY) they logged a 5% decline sequentially, within which retail spends were up 13% YoY (-4% QoQ), while corporate spends declined 10% QoQ (flat YoY).

Retail spends remained higher than pre-Covid levels, while corporate spends reached pre-COVID levels – on the back of new use cases making up for the loss in travel spends. Online retail spends form ~52% of the total retail spends.

This development comes when a major rival HDFC Bank is hamstrung as RBI has barred it from issuing new credit cards.

According to the management, spends across categories, barring travel and entertainment, have reached pre-Covid levels. Corporate spends have also reached pre-Covid levels, while corporate travel remains impacted. New use cases across corporates have been making up for the loss in travel spends.

However, the YoY growth is far lower than the pre-pandemic growth trend, which remains a worry.

Also, the gross non-performing assets (GNPA) ratio increased to 4.96% (versus proforma 4.51% in the December quarter), while the NNPA ratio declined to 1.15% (versus 1.58% in the third quarter of FY21).

Total receivables

Total receivables grew 4% YoY (2.5% QoQ decline) to Rs 25110 crore. The receivables mix indicated a marginal increase in the number of transactors and decline in revolvers – resulting in moderation in yields and an impact on the margins. Receivables per card continued to decline, reaching Rs 21,000 crore in the fourth quarter.

With the spends towards essentials are small in size than discretionary, the second wave of the pandemic poses significant risks to growth for SBI Card.

SBI Cards results

SBI Cards reported net profit growth of 110% YoY to Rs 175 crore, which was below analyst estimates. It was affected by a 21% YoY/8% sequential decline in interest income and modest fee income. Although, lower opex supported pre-provision operating profit (PPoP). For FY21, NII (net interest income)/PPOP was up 9.7%/9.6% YoY, while PAT declined ~21% YoY. NII declined 18.3% YoY, with margins down 130bp QoQ to 13.2%. Income from fees and services was stable QoQ at INR11.1b (+16% YoY) as overall spends declined ~5% QoQ. Thus, total income grew 2% YoY to INR22.2b, while opex declined 4.6% QoQ, resulting in stable PPoP (9% miss).

Cards in force grew 12% YoY to 11.8 million. New account sourcing for the fourth quarter stood at 93% of 4QFY20 levels. SBI contributed ~54% to new cards sourced, which accounts for ~44% of the overall card base.

For the financial year ended March 31, total income was at Rs 9,714 crore for FY21 vs Rs 9,752 crore for FY20. The profit after tax came at Rs 985 crore for FY21 versus Rs 1,245 crore in the previous fiscal.

The total balance sheet size as of March 31, 2021, was Rs 27,013 crore as against Rs 25,307 crore as on the same date of last year.



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