Banking & Finance – Page 73

Axis Bank’s Q2 standalone net up 86%

October 26, 2021 root Banking & Finance

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Private sector lender Axis Bank reported an all time high quarterly net profit of ₹3,133.32 crore in the second quarter of the fiscal as provisions declined.

This was 86.21 per cent higher than ₹1,682.67 crore in the second quarter of last fiscal.

For the quarter-ended September 30, 2021, the bank’s net interest income grew eight per cent year-on-year to ₹7,900 crore from ₹7,326 crore in the same period last fiscal.

Net interest margin stood at 3.39 per cent compared to 3.58 per cent a year ago.

In a media call on Tuesday, the bank said it expects NIM to improve as growth improves and the bank deploys liabilities more effectively.

Other income grew by 6.4 per cent in the July to September 2021 quarter to ₹3,798.38 crore from ₹3,569.35 crore in the same period last fiscal. Fee income grew 17 per cent year-on-year to ₹3,231 crore in the quarter under review.

Provisions fell by 60 per cent to ₹1,735.09 crore in the second quarter of the fiscal from ₹4,342.82 crore a year ago.

“The bank has not utilised Covid provisions during the quarter. The bank holds cumulative provisions (standard + additional other than NPA) of ₹12,951 crore at the end of the second quarter of 2021-22,” Axis Bank said in a statement on Tuesday.

Gross NPA falls

As on September 30, 2021, the bank’s reported gross NPA stood at ₹24,148,61 crore or 3.53 per cent of gross advances. This was at 3.85 per cent as on June 30, 2021 and 4.18 per cent as on September 30, 2021.

Net NPAs, however, increased to ₹7,199,97 crore or 1.08 per cent at the end of the second quarter from 0.98 per cent a year ago. However, on a sequential basis, it fell from 1.2 per cent as on June 30, 2021.

“On the business front, we are seeing solid progress. We continue our focus on SMEs and mid-corporate segments, and on the retail side we see better disbursements and growth driven by secured products,” said Amitabh Chaudhry, Managing Director and CEO, Axis Bank, adding that consumer and business confidence is likely to trend up in the second half of the fiscal.

The bank’s deposits grew 18 per cent year-on-year to ₹7,36,286 crore while advances grew 10 per cent year-on-year to ₹6,21,719 crore as on September 30, 2021.

Axis Bank said its restructuring amounted to 0.64 per cent of customer assets and was amongst the lowest in the larger peer banks.

It implemented resolution plans in 8,162 accounts with an exposure of ₹2,124.2 crore under the RBI’s Resolution Framework 1.0. Of this, ₹45.77 crore slipped into NPA during the first half of the year and ₹26.51 crore was written off.

Under the Resolution Framework 2.0, the bank has an exposure of ₹2,518.56 crore to accounts where resolution plans have been implemented. This has led to an increase in provisions by ₹680.89 crore.

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Central Bank of India reports 55% y-o-y rise in second quarter net profit

October 26, 2021 root Banking & Finance

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Central Bank of India (CBoI) reported a 55 per cent year-on-year (yoy) rise in its second quarter net profit at ₹250 crore against ₹161 crore in the year ago period, buoyed by lower loan loss provisions, write-back in provisions for standard assets, among others.

The public sector bank’s net interest income (difference between interest earned and interest expended) was up about 6 per cent y-o-y to ₹2,495 crore (₹2,354 crore in the year ago period).

Total non-interest income, comprising fee-based income, treasury income and other receipts edged up 1.55 per cent y-o-y to ₹720 crore (₹709 crore).

Loan loss provisions declined 56 per cent y-o-y to ₹311 crore (₹707 crore). The bank received a write-back of ₹394 crore from provisions it made towards standard assets (against ₹33 crore provision it had made under this head). Income tax provision was also lower at ₹103 crore (₹193 crore).

Slippages

Fresh slippages were higher at ₹2,104 crore (₹1,281 crore in the first quarter). Reduction in non-performing assets (NPAs), including via upgradation, recovery (including sale to asset reconstruction company), regular write-off, stood at ₹2,781 crore (₹2,790 crore).

Gross NPAs improved to 15.52 per cent of gross advances as on September-end 2021 against 15.92 per cent as on June-end 2021. Net NPAs also improved to 4.51 per cent of net advances as against 5.09 per cent.

The bank seems to be closer to being brought out of the Reserve Bank of India’s prompt corrective action (PCA) framework as it is no longer in breach of any of the four risk thresholds (capital, asset quality, profitability and leverage), going by the numbers in the analyst presentation.

Total advances declined about 1 per cent y-o-y to ₹1,75,594 crore. The lender said it had done a technical write-off (two) of advances of ₹4,810 crore during quarter-ended March 2021. If this was not done, then figure of advances as on September-end 2021 would have been ₹1,80,404 crore, with y-o-y growth of 1.75 per cent.

Total deposits increased by 4 per cent y-o-y to ₹3,36,500 crore. The share of low-cost CASA deposits increased to 49.79 per cent of total deposits from 47.72 per cent in the year ago period.

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Bajaj Finance Q2 net up 53.5%

October 26, 2021 root Banking & Finance

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Bajaj Finance reported a 53.5 per cent jump in its consolidated net profit for the second quarter of the fiscal to ₹1,480.99 crore against ₹964.88 crore in the corresponding period last fiscal.

For the quarter-ended September 30, total revenue from operations increased by 18.7 per cent to ₹7,731.36 crore from ₹6,513.15 crore a year ago.

NII rises

Net interest income for the second quarter of the fiscal increased by 28 per cent to ₹5,335 crore as against ₹4,162 crore a year ago.

Interest income reversal for the quarter stood at ₹322 crore as compared to ₹216 crore in the second quarter last fiscal.

New loans booked during the second quarter were up 75 per cent to 63.3 lakh from 36.2 lakh in the second quarter last fiscal.

Loan losses and provisions for the July to September 2021 quarter stood at ₹1,300 crore as against ₹1,700 crore in the second quarter last fiscal.

“During the quarter, the company has done accelerated write-offs of ₹355 crore of principal outstanding on account of Covid-19 related stress and advancement of write-off policy,” Bajaj Finance said in a statement on Tuesday.

The company holds management and macro-economic overlay of ₹832 crore as of September 30, 2021.

Gross non-performing assets and net NPA as of September 30, 2021 stood at 2.45 per cent and 1.1 per cent respectively, as against 2.96 per cent and 1.46 per cent as of June 30, 2021.

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Net profit jumps 55% to Rs 250 crore, BFSI News, ET BFSI

October 26, 2021 root Banking & Finance

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New Delhi: Public sector Central Bank of India on Tuesday reported an over 55 per cent jump in net profit at Rs 250 crore for the quarter ended September. The lender had posted a net profit of Rs 161 crore during the same quarter of the previous fiscal.

However, total income of the bank during July-September period of 2021-22 was down at Rs 6,503.39 crore, as against Rs 6,762.36 crore in the year-ago period, it said in a regulatory filing.

Net interest income rose 5.99 per cent to Rs 2,495 crore, as against Rs 2,354 crore earlier.

Net interest margin (NIM) improved from 3.21 per cent to 3.36 per cent on a year-on-year basis, registering an improvement of 15 basis points, it added.

On the asset quality front, net non-performing assets (NPAs or bad loans) reduced to 4.51 per cent as of September 30, 2021, from 5.60 per cent by end of the same month last year.

Gross NPAs moderated to 15.52 per cent from 17.36 per cent.

Also, the bank’s cost of deposit declined to 3.84 per cent from 4.45 per cent for the reported quarter.

However, there was a slight uptick in provisions and contingencies for the quarter at Rs 1,048.52 crore, as against Rs 1,033.34 crore parked aside in the September 2020 quarter.

The state-owned lender said its slippage ratio stood at 1.45 per cent as against 0.08 per cent as there was a moratorium granted by RBI due to the COVID-19 pandemic. In the June 2021 quarter, it was 0.95 per cent.

“Slippage ratio during the quarter increased due to slippage of two corporate accounts of Rs 1,150 crore. Had these accounts not slipped during the quarter then the slippage ratio for Q2FY22 would have been 0.67 per cent,” the bank said in a release.

Total business stood at Rs 5,12,094 crore as on September 30, 2021, compared to Rs 5,00,737 crore earlier, registering a growth of Rs 11,357 crore (2.27 per cent) year-on-year.

Total deposits have increased by Rs 13,056 crore and stood at Rs 3,36,500 crore at the end of the quarter, from Rs 3,23,444 crore in the year-ago period, reflecting an increase of 4.04 per cent, it added.

Central Bank of India scrip closed at Rs 23.60 apiece on BSE, up 4.66 per cent from the previous close.

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Kotak Mahindra Bank Q2 net down 7%

October 26, 2021 root Banking & Finance

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Private sector lender Kotak Mahindra Bank reported a seven per cent year-on-year (y-o-y) drop in its standalone net profit for the second quarter of the fiscal due to higher provisions. For the quarter-ended September 30, the bank’s standalone net profit stood at ₹2,032.01 as against ₹2,184.48 crore in the same period last fiscal. However, on a sequential basis, its net profit increased by 24 per cent from ₹1,642 crore for the first quarter of the fiscal.

Its net interest income increased three per cent to ₹4,021 crore in the second quarter of the fiscal from ₹3,897 crore a year ago.

Net interest margin for the second quarter of the fiscal stood at 4.45 per cent from 4.5 per cent a year ago.

The bank’s other income increased by 26.5 per cent on an annual basis to ₹1,812.59 crore in the quarter under review.

Provisions jumped up by 27.2 per cent to ₹423.99 crore in the July to September 2021 quarter from ₹333.22 crore in the same period last fiscal.

The bank said it holds Covid-19 provisions of ₹1,279 crore which has not been utilised during the first half of the fiscal year.

Asset quality

As on September 30, 2021, gross non-performing assets stood at 3.19 per cent of gross advances as against 3.56 per cent as on June 30, 2021 and 2.55 per cent as on September 30, 2020. It was lower than ₹703.52 crore in the first quarter of the fiscal.

Net NPA was 1.06 per cent of net advances at the end of the second quarter versus 1.28 per cent at the end of the first quarter and 0.64 per cent as on September 30, 2020.

Jaimin Bhatt, Group President and Group Chief Financial Officer, Kotak Mahindra Bank said that gross slippages amounted to ₹1,293 crore and recoveries and upgrades stood at ₹1,350 crore in the second quarter of the fiscal.

In accordance with the Resolution Framework for Covid-19 related stress of individuals and small businesses, the bank has implemented total restructuring of ₹495 crore (0.21 per cent of advances) as on September 30, 2021.

In addition, in accordance with the Resolution Framework for Covid-19 related stress of MSMEs, the bank has implemented total restructuring of ₹767 crore (0.33 per cent of advances) as at September 30, 2021.

The bank implemented resolution plans in 6,522 accounts with an exposure of ₹226.66 crore under the RBI’s Resolution Framework 1.0. Of this, 27.32 crore slipped into NPA in the first half of the fiscal and the bank wrote-off ₹17.68 crore.

Under Resolution Framework 2.0, the lender has implemented resolution plans in 2,234 accounts with a total exposure of ₹268.63 crore. On account of this, the bank increased provisions by ₹37.73 crore.

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Canara Bank Q2 net jumps 200% to ₹1,333 crore

October 26, 2021 root Banking & Finance

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Canara Bank reported a 200 per cent year-on-year (y-o-y) jump in second quarter net profit at ₹1,333 crore against ₹444 crore in the year-ago period, supported by healthy growth in other income and lower loan loss provisions.

Net interest income (difference between interest earned and interest expended) was down a shade at ₹6,273 crore (₹6,305 crore in the year ago period).

Non-interest income, comprising fee-based income, trading income, recovery in written-off accounts, and others, was up 37.54 per cent y-o-y at ₹4,268 crore (₹3,103 crore).

Loan loss provisions declined 24 per cent y-o-y at ₹2,678 crore (₹3,533 crore).

Slippages and recovery

Fresh slippages during the quarter increased by ₹6,525 crore (₹4,253 crore in the preceding quarter). This includes ₹3,200 crore exposure to the SREI Group.

The public sector bank made higher cash recovery of ₹3,002 crore (₹1,598 crore in the preceding quarter). Upgradation and write-offs amounted to ₹2,671 crore (₹2,292 crore) and ₹1,585 crore (₹2,574 crore), respectively.

Gross non-performing assets (NPAs) position improved 8 basis points to 8.42 per cent of gross advances against 8.50 per cent as on June-end 2021.

Net NPA position improved 25 basis points to 3.21 per cent of net advances against 3.46 per cent as on June-end 2021.

LV Prabhakar, MD & CEO, observed that going forward, the bank’s balancesheet will strengthen further, with gross non-performing assets (excluding transfer of stressed assets to the National Asset Reconstruction Company) expected to decline to at least 7.5 per cent by March-end 2022 and credit growth (global) projected at 7.5 per cent for FY22, seen picking up steam from third quarter onwards.

The bank recovered about ₹1,700 crore from DHFL’s corporate insolvency resolution process (CIRP) and made 50 per cent provision towards its exposure to the SREI Group, which has become a non-performing account, Prabhakar said.

Net interest margin declined to 2.72 per cent from 2.82 per cent as on September-end 2020.

Global (domestic plus overseas) gross advances grew about 6 per cent y-o-y to ₹6,86,813 crore.

Within domestic advances (which were up 5.71 per cent yoy), Agriculture & Allied advances grew by 13.92 per cent; retail (10.46 per cent); MSME (0.31 per cent); and corporate and others (2.23 per cent). Overseas advances increased by 9.36 per cent yoy.

Global Deposits rose about 9 per cent to ₹10,32,536 crore. Domestic deposits and overseas deposits increased by 7.61 per cent and 38.15 per cent, respectively.

The proportion of low-cost CASA deposits improved to 34.11 per cent in total domestic deposits as at September-end 2021 against 32.77 per cent as at September-end 2020.

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BharatPe opposes PhonePe’s trademark over ‘PE’ usage in Devanagari

October 26, 2021 root Banking & Finance

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Resilient Innovations or BharatPe, which recently launched a ‘buy now pay later’ app under the trademark “postpe”, has filed six cancellation actions against the multiple registrations held by PhonePe for the ‘PE’ device mark in Devanagari script, at the intellectual property division of the Delhi High Court.

“By taking on a trademark for the ‘PE’ device mark in Devanagari script in classes relating to payment services in a country like India, where Hindi is the primary language of the masses, PhonePe has acted against the larger public interest, and Resilient is committed to undoing this,” Resilient Innovations said on Tuesday.

A company statement further said that PhonePe has been asserting its registration for the ‘PE’ device mark in Devanagari script as equivalent to the English word “pay”.

Strong growth in digital payments indicates a lasting shift in consumer payment behaviour

“This was the same position taken by PhonePe in a recent case filed by it before the Bombay High Court against Resilient’s use of the mark ‘postpe’, which stands withdrawn at present,” it further said.

Coming soon, new framework for offline digital payments

Earlier this year, the Delhi High Court had rejected PhonePe’s assertion of exclusivity over the usage ‘PE’ at the interim stage. Even the Bombay High Court rejected PhonePe’s assertion at the interim stage.

“Both courts noted that the word ‘PE’ was prima facie incapable of protection as a trademark standalone,” the company said.

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Canara Bank Q2FY22 net profit triples

October 26, 2021 root Banking & Finance

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Canara Bank reported a 200 per cent year-on-year (yoy) jump in second quarter net profit at ₹1,333 crore against ₹444 crore in the year ago period, supported by healthy growth in other income and lower loan loss provisions.

Net interest income (difference between interest earned and interest expended) was down a shade at ₹6,274 crore (₹6,305 crore in the year ago period).

Non-interest income, comprising fee based income, trading income, recoery in written-off accounts, and others, was up 37.54 per cent yoy at ₹4,268 crore (₹3,103 crore).

Loan loss provisions declined 24 per cent yoy at ₹2,678 crore (₹3,533 crore).

Fresh slippages during the quarter increased by ₹6,525 crore (₹4,253 crore in the preceding quarter).

Gross non-performing assets (NPAs) position improved 8 basis points to 8.42 per cent of gross advances against 8.50 per cent as at June-end 2021.

Net NPA position improved 25 basis points to 3.21 per cent of net advances against 3.46 per cent as at June-end 2021.

Net interest margin declined to 2.72 per cent from 2.82 per cent as at September-end 2020.

Global (domestic plus overseas) gross advances grew about 6 per cent yoy to ₹6,86,813 crore.

Global Deposits nudged up about 9 per cent to ₹10,32,536 crore. Domestic deposits and overseas deposits increased by 7.61 per cent and 38.15 per cent, respectively.

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