Tag: axis bank

Bankers of McLeod Russel sign ICA for resolution on debt recast, BFSI News, ET BFSI

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Bulk tea major McLeod Russel India on Friday said its bankers have signed an Inter Creditors Agreement (ICA), a precursor to a resolution plan for debt restructuring, that rekindled hope of revival of the once largest tea producer of the world. After the promoters of McLeod reach a settlement with a financial creditor, Techno Electric & Engineering, the company could be out of National Company Law Tribunal‘s insolvency process.

The trigger for the insolvency application by Techno was a loan agreement for providing Rs 100 crore inter-corporate deposit (ICD).

“We hope to reach a satisfactory resolution shortly with the bankers on debt recast,” a McLeod official told PTI.

“All the banking lenders have signed/executed an Inter Creditors Agreement (ICA) to provide for ground rules for finalisation and implementation of Resolution Plan in respect of borrower/Company”, McLeod Russel said in a stock exchange filing.

There are nearly 8-10 lenders including a combination of private and public-sector banks, such as Axis Bank, UCO Bank, Allahabad Bank, Indusind Bank and ICICI Bank.

The outstanding debt including interest will be around Rs 2100-2300 crore, company officials estimated which is not sustainable for the tea major.

Till March 2018, McLeod had 52 estates in the country producing 67 million kg of tea with a total saleable production of 89 million kg. By FY20, its total saleable quantity had dropped by nearly 53 per cent to 42 million kgs with the company selling estates to square off debts.

A slew of ICDs – unsecured borrowings from other entities – extended to some of the other BM Khaitan group companies, hurtled the tea major into a serious crisis. PTI BSM NN NN



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Upset over deal with Axis Bank, Spandana MD Gangireddy quits

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Another spat between an investor and founder has erupted after the recent dispute between promoters of Zee Entertainment and Invesco. Spandana Sphoorty Financial’s Founder and Managing Director Padmaja Gangireddy has resigned from the microfinance lender following a disagreement with private equity investor Kedaara Capital over a proposal to sell the company to Axis Bank. Reddy has 17 per cent stake in the company while Kedaara holds 45 per cent.

According to Gangireddy, Kedaara wants to sell the country’s second-largest microfinance entity to Axis Bank at a throwaway price. “I opposed underselling of the company to Axis Bank at a throwaway price. While other MFIs were acquired at 4.75x and 3,5x BV multiples in the past few months, Kedaara wanted to sell Spandana at 1.6x, which is one-third of other company’s valuation. They are hell-bent on selling the company for their personal benefits,” Gangireddy said in a letter to the employees.

While Axis and Kedaara are yet to comment on Gangireddy’s claims, the company said in a statement that the board of directors has accepted Gangireddy’s resignation. KR Kamath, former Chairman & Managing Director of Punjab National Bank and board member of Spandana, will chair the management committee. “The board confirmed the hiring of an eminent industry veteran as its new MD & CEO,” the statement said without naming the executive. Industry sources said that Shalabh Saxena, MD & CEO of Bharat Financial Inclusion Ltd, could be appointed as the new CEO of Spandana.

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Credit card spends jump 60% in September, set for further festive push, BFSI News, ET BFSI

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Another option, if you are unable to make payments by the due date, is opting for a loan against your credit card. Various credit card companies offer pre-approved loans to customers, these can actually come in handy in this scenario. However, be mindful of the costs as the interest rate and other charges may be steeper. If you have multiple credit cards, compare interest rates and processing fees on each and go with the one that has least total cost for your preferred loan tenure.

Credit card spends jumped 60 per cent year-on-year (YoY) in September, helped by the onset of the festive season.

On a sequential basis, the growth slowed down to 3 per cent at Rs 80,500 crore, according to various research reports.

The festive season, opening up of the economy and rising consumer confidence is set to keep the credit card spends buoyant, experts say.

Kotak Mahindra Bank reported the highest growth (27% MoM) in September, followed by IndusInd Bank and ICICI Bank (13% each). Other major players reported growth in the +-4% range. On a two-year CAGR basis, spends for ICICI Bank grew 58%, IndusInd 33%, Kotak Mahindra Bank 29%. HDFC Bank and SBI Cards posted growth of 10–15% and Axis Bank and SCB 2–3%. While, Citi and Amex saw a decline of 8% and 26%, respectively. ICICI Bank surpassed SBI Cards to become the second-largest player in spends, with market share of 19.3% over 6MFY22.

Outstanding credit cards up 10.8%

The total number of outstanding credit cards in the system grew 10.8% YoY to 65 million in September 2021 – the highest in the past 11 months.

Among the major players, ICICI Bank reported strong growth of 26.1% YoY, followed by IndusInd Bank (15.6%), SBI Cards (14.3%). Foreign players such as American and Citi witnessed declines of 10% and 5% respectively. SBI Cards and ICICI Bank continued to perform strongly, resulting in a 59–218 bps YoY increase in market share to 19.3% and 18.0% respectively in September.

ICICI Bank added close to 2 million new cards in the past 10 months, taking its credit card base to 11.6 million as of September.

Despite a 247 bps year on year decline, HDFC Bank remained the largest player with a market share of 23.0%.

10.91 lakh card adds

Around 10.91 lakh new cards were added to the system in September with HDFC Bank being the largest acquirer at 2.44 lakh cards. ICICI Bank added 2.34 lakh, Axis Bank added 2.03 lakh, while SBI Cards added 1.75 lakh cards in September, while, Standard Chartered Bank, AMEX and Citi posted a decline of 13,000, 11,000 and 4,500, respectively, in the card base. IDFCF Bank also posted a strong performance with 39,000 new credit card additions in September.

Higher spends per card

Monthly spends per card for the industry increased to Rs 12400, from an average of Rs 10,700 over the past six months (higher v/s pre-Covid levels). This was attributable to an increase in the ticket size to Rs 4,300, the highest in the past several years.

Conversely, the number of transactions per card declined to 2.8 v/s 3.0 in August (3.1 in March). IndusInd and Kotak Mahindra Bank saw a higher increase of Rs 2,400 and Rs 2,200, respectively, followed by ICICI Bank with Rs 1,400.

IndusInd (Rs 9,700) and Amex (Rs 5,900) had the highest ticket sizes, followed by Kotak Mahindra Bank (Rs 5,100) and ICICI Bank (Rs4,900). All other players were in the range of Rs 3,900–Rs 4,300 – barring Citi and SCB, which were lower at Rs 3,000–3,200.



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Private banks’ NPAs fall in Q2 as economy charts recovery path, BFSI News, ET BFSI

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With the economy opening up, the asset quality of private banks improved in the September quarter. Further, banks efforts in reducing slippages, improved collections, better recoveries from written off accounts and RBI mandated loans recast also helped banks keep a lid on NPAs.

While the year on year NPA figures of most banks were higher than the last quarter’s figures, they are not comparable as after the Supreme Court‘s stay on classifying loans that were standard as on August 31 from NPAs banks had reported NPAs under proforma figures.

The drop

HDFC Bank, India’s largest private sector lender, reported a drop in gross non-performing assets (GNPAs) to Rs 16,346 crore during July-September against Rs 17,099 crore in the preceding quarter. Provisions and contingencies also dropped to Rs 3,924.70 crore during the quarter compared with Rs 4,830.84 crore in the June quarter. GNPA ratio fell to 1.35 per cent as of September from 1.47 per cent in the June quarter. It was 1.08 per cent in the same quarter, a year ago.

ICICI Bank‘s gross non-performing assets fell to 4.82 per cent of gross advances as on September 30, against 5.15 per cent in the June quarter. Net NPAs (bad loans) also fell to 0.99 per cent from 1.16 per cent sequentially in the September quarter.

Federal Bank‘s asset quality improved on a sequential basis as gross NPA came at 3.24% as against 3.50% in the previous quarter. Its net NPA stood at 1.12% from 1.23% quarter-on-quarter (QoQ). However, the gross NPA during the year-ago quarter stood at 2.84% whereas net NPA at 0.99%. Provisions (other than tax) and contingencies declined to Rs 245 crore as against Rs 543 crore in the previous quarter and Rs 532 crore in the year-ago quarter.

Axis Bank and Kotak Bank

Axis Bank’s gross NPAs came in at 3.53% in the second quarter, lower than 3.85% in the June quarter and 4.18% in the previous year period. Meanwhile, the net NPA ratio during the quarter stood at l.08%.

Kotak Mahindra Bank’s gross NPAs during the second quarter stood at 3.19% compared with 3.56% in the June quarter. However, it was higher than 2.70% in the year-ago quarter. Meanwhile, the net NPA improved to 1.06% versus 1.28% on a sequential basis, and remained flat on a year-on-year basis.

What Crisil says

GNPAs of banks will rise to 8-9 per cent this fiscal, well below the peak of 11.2 per cent seen at the end of fiscal 2018, with the COVID-19 relief measures such as restructuring dispensation, and the Emergency Credit Line Guarantee Scheme (ECLGS) helping limit the rise, according to CRISIL Ratings.

GNPAs as at March-end 2021 had declined to 7.5 per cent against 8.2 per cent as at March-end 2020.

With about 2 per cent of bank credit expected under restructuring by the end of this fiscal, stressed assets ― comprising gross NPAs and loan book under restructuring ― should touch 10-11 per cent (against March-end 2021 estimate of about 9 per cent), the credit rating agency said.



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Here’s what top banks are offering this festive season, BFSI News, ET BFSI

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While the COVID-19 and the resultant lockdown affected the celebrations last year, the festive season finally seems to be getting back on track.

The country is celebrating Diwali this week, giving an opportunity to companies and banks to incentivise their business by offering discounts on a range of items from jewellery to smartphones.

The lockdown was heavy on most, and affected the finances of several families. However, to ensure that these temporary setbacks do not come in the way of Diwali shopping and celebrations, a number of festive offers are up for grabs this year.

State Bank of India- #KhushiyonKaSwagat

This Diwali, if a customer of State Bank of India (SBI) applies for a car loan through YONO app, then they can get an interest rate concession of up to 0.5%, with zero processing fees, the bank said in a tweet.

Customers can get cash back offers up to Rs 2,500 on every purchase on e-commerce sites such as Flipkart and Amazon. Besides, one can get instant loan approval now.

The bank is offering car loans from 7.25%, gold loans from 7.50%, personal loans from 9.60%.

Additionally, the home loan offer which was started in September is still there. SBI currently offers home loans at only 6.7% for any amount and any tenure without any processing fees.

ICICI Bank- #FestiveBonanza

ICICI Bank launched ‘Festive Bonanza’ with a complete range of offers, heavy discounts and cash back available on a range of products, including luxury items from premium brands and leading e-commerce platforms.

As part of the ‘Festive Bonanza’, the bank is offering up to 20% cash back and discount on every purchase on Amazon, Myntra, Flipkart, Jiomart, Reliance Digital, among other platforms.

Besides, benefits are there for retail and business customers on various banking products and services such as home loan, car loan, overdraft facility and others.

Diwali 2021: Here's what top banks are offering this festive season

HDFC Bank- #FestiveTreats

HDFC bank has partnered with over 10,000 merchants across more than 100 locations to offer special deals specifically created for their personal and business needs in this Diwali time.

Benefits offered to customers include cash backs and no-cost EMIs on premium mobile phones, up to 22.5% cash back and no-cost EMI on electronics and consumer goods such as washing machines and refrigerators on shopping platform Amazon by using HDFC Bank’s credit and debit cards.

Personal loans starting at 10.25% interest with instant disbursal in account are also there. Customers can avail car loans starting at 7.50% with zero foreclosure charges and funding of up to 100% on two-wheeler loans and 4% less on interest rates, the bank said

BOI- #BOIUtsav

Bank of India has announced a 35 basis-point cut in its home loan interest rates and 50 basis-point reduction in vehicle loan interest rates. The minimum rate now starts at 6.50% against 6.85% on home loans and 6.85% against 7.35% earlier on vehicle loans.

This special rate, which was effective from October 18 till December 31, is available for customers applying for fresh loans, and for those seeking transfer of loans. Processing charges have also been waived for both the loans till 2022.

Axis Bank- #DilSeOpenCelebrations

Axis Bank is offering waivers of 12 EMIs on select home loan products in this festive season and providing on-road finance without any processing fees for two-wheelers customers.

To boost local retailers during this season, Axis Bank has roped in more than 2,500 local stores across 50 cities. The bank customers will get discounts up to 20% on shopping from these stores. Besides, one can get 10% or more cash back when purchasing on popular e-commerce platforms such as Flipkart and Amazon.

BOB- #KhushiyonKaTyohaar

Bank of Baroda also extended Diwali offers. This bank has slashed interest rates on both home car loans that start from 6.5% and 7% respectively. Processing charges are also waived for both the loans.



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Axis AMC raises Rs 400 crore through first close of Axis Growth Avenues AIF, BFSI News, ET BFSI

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Axis Asset Management Company, an arm of private sector lender Axis Bank, has raised around Rs 400 crore through the first close of Axis Growth Avenues AIF – I, aiming to fund ideas with deep technology as their USP.

The asset management company is aiming to raise a total of Rs 1,000 crore through the close-ended fund, including a green-shoe option of Rs 500 crore. It is confident of completing the entire fundraising exercise in the current quarter based on the response and commitments from investors.

The fund has achieved the first close with investments from family offices, high networth individuals (HNIs) and non-resident Indians (NRIs).

The fund will be investing primarily in mid-to-late-stage technology enabled companies with scalable business models and a favourable risk-return profile. The sector-agnostic fund will be investing in companies catering to latent demands with multi-year growth potential and differentiated business model.

Axis Growth Avenues AIF – I will be exploring both primary and secondary investment opportunities with the proposed portfolio size of 8-10 companies with deal size ranging from Rs 25 crore to Rs 100 crore each.

The AMC has a strong pipeline of investments and expects to start deploying funds from the AIF soon.

“The strong response that we are receiving for the Axis Growth Avenues AIF I, reflects the confidence that investors and partners have in us as well as the potential of this segment. It will be our endeavour to ensure that we deploy this money in companies that offer exciting long term growth opportunities and are aligned with our investment philosophy,” said Chandresh Nigam, MD & CEO Axis AMC.

The total term of the fund will be five years from its final closing and may be extended for two additional periods of one year each.

The AIF is looking to capitalize on innovation and growth in the economy and to invest in companies that are benefiting from these trends. The fund will be primarily focused on investing in sectors including financial services especially fintech, technology, e-commerce, and edtech.

While making the investments, the fund will ensure that the investee company has a clear plan to go public with an initial public offer (IPO) over 3-5 years’ horizon and preferably the founders are open to a strategic sale for an optimum value.

The fund will be keen on investing in companies that are likely to emerge as beneficiaries of the fast-evolving digital economy as either as a disruptor, enabler or adaptor. It will also ensure the presence of established investors who are shareholders in the company through previous rounds of funding.



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Private banks’ net profit up 26% as economic revival kicks in, BFSI News, ET BFSI

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The net profit of private banks rose 26 per cent year on year in the July-September 2021 quarter and 21.9 per cent sequentially over March-June 2021 (Q1), as the pandemic ebbed and economic recovery has taken hold.

The 12 private lenders posted a collective net profit of Rs 21,965 crore during the second quarter.

Provisions and contingencies of the lenders that have declared results fell both 22 per cent year on year and 30.2 per cent quarter on quarter to Rs 12,805 crore. The provisions include those for one time restructuring of loans announced by the RBI in May.

Net interest income was up 10.8 per cent y-o-y and 2.5 per cent sequentially. Other income rose 15.7 per cent to Rs 22,638 crore.

Gross non-performing assets grew 1.1% to Rs 1.73 lakh crore y-o-y, but fell 3.5 per cent sequentially from about Rs 1.8 lakh crore in the June quarter.

Net NPAs rose by 27.5 per cent y-o-y to Rs 42,895 crore, but fell sequentially by 7.3 per cent from Rs 46,280 crore in June 2021.

ICICI Bank

ICICI Bank posted a higher-than-expected 29.6% on-year rise in net profit to Rs 5510 crore in July-September, which was highest in the bank’s history. As the bank maintained 17% growth in advances, and further improved on net interest income and margins, asset quality ratios provided additional support to the bottomline by keeping provision costs low.

Axis Bank

Axis Bank reported an over 86% year-on-year rise in net profit to Rs 3130 crore for the September quarter, benefiting from an improvement in asset quality, which led to a fall in provisioning. The bank expects consumer and business confidence to continue to trend upward in Oct-Mar on the back of a rise in vaccination coverage and as the economy opens up, pent-up demand and spends materialise.

Federal Bank

Federal Bank posted a higher than expected net profit of Rs 460 crore in the September quarter, led by a fall in overall provisions as the lender reported improvements in asset quality. The bank’s net profit rose 49.6 per cent on year, and 25.3 per cent on quarter. This was supported by a faster-than-industry credit growth that fuelled a rise in core ratios such as net interest income and net interest margins.

YES Bank

Yes Bank’s net profit jumped 74 per cent year-on-year in the September quarter to Rs 230 crore on the back of a sharp fall in provisioning. Going ahead, a sharp reduction in overdue loans and sustained momentum in loan recoveries and upgrades augurs well for the overall asset quality of the bank.

RBL Bank

RBL Bank posted a 78.6 per cent on-year fall in net profit for the September quarter at Rs 30 crore due to higher provisions amid an increase in bad loans. For April-June, the private sector lender had reported a net loss of Rs 460 crore. Slippages, gross non-performing assets ratios, and provisions had peaked in the reporting quarter, and the lender was on track to see growth, the bank said.



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Axis AMC raises Rs 400 crore via Growth Avenues AIF-I, BFSI News, ET BFSI

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Axis Asset Management Company, an arm of private sector lender Axis Bank, has raised around Rs 400 crore through first close of Axis Growth Avenues AIF-I, aiming to fund ideas with deep technology as their USP. The asset management company is aiming to raise a total of Rs 1,000 crore through the close-ended fund, including a greenshoe option of Rs 500 crore. It is confident of completing the entire fundraising in this quarter, based on response and commitments from investors.

The fund has achieved the first close with investments from family offices, high networth individuals (HNIs) and non-resident Indians (NRIs). The fund will be investing primarily in mid-to-late stage technology-enabled companies with scaleable business models and a favourable risk-return profile. The sector-agnostic fund will be investing in companies catering to latent demands with multiyear growth potential and differentiated business model.

Axis Growth Avenues AIF-I will be exploring both primary and secondary investment opportunities with the proposed portfolio size of eight to 10 companies, with deal size ranging from Rs 25 crore to Rs 100 crore each.

The AMC has a strong pipeline of investments and expects to start deploying funds from the AIF soon. “The strong response that we are receiving for the Axis Growth Avenues AIF-I, reflects the confidence investors and partners have in us, as well as the potential of this segment. It will be our endeavour to ensure we deploy this money in companies that offer exciting long term growth opportunities and are aligned with our investment philosophy,” said Chandresh Nigam, chief executive, Axis AMC.

Total fund term will be five years from its final closing and may be extended for two additional periods of one year each. The AIF is looking to capitalise on innovation and growth in the economy and to invest in companies that are benefiting from these trends. It will be primarily focused on investing in fintech, technology, ecommerce and edtech.



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Axis Bank board OKs appointment of Rajiv Anand as Deputy Managing Director, BFSI News, ET BFSI

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The board of Axis Bank today approved the appointment of Rajiv Anand, executive director– wholesale banking, as the deputy managing director of the bank.

The appointment is subject to further approvals from the Reserve Bank of India and shareholders of the bank. In addition to leading Wholesale Banking, Rajiv would work closely with the board in strengthening control and governance aspects, the bank said in a release.

Rajiv henceforth would also be leading the bank’s strategic digital banking agenda, impacting all parts of Axis franchise, along with wholesale banking, marketing and corporate communications, the release said.

“Rajiv has been instrumental in driving various key initiatives and has worked hand-in-hand with me to make the Bank a more robust, growth focused organization, as we drive transformation under our GPS strategy,” said Amitabh Chaudhry, managing director and chief executive officer.

Rajiv carries more than 30 years of experience in financial services across Indian and MNC banks. He has been with Axis group for more than 12 years, and has held multiple leadership positions such as managing director and chief executive officer of Axis AMC, ED – Retail Banking and the present role of ED – Wholesale Banking.



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Axis Bank’s Q2 standalone net up 86%

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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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