Axis Bank's net profit fell 21.37% to Rs 1555.53 crore on 13.22% growth in total income to Rs 13852.18 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours on Friday, 22 July 2016. The fall in net profit was due to a sharp surge in provisions and contingencies. Provisions and contingencies jumped 88.73% to Rs 2117.17 crore in Q1 June 2016 over Q1 June 2015. On a sequential basis, provisions and contingencies surged 81.21%. The bank's net interest income rose 11.36% to Rs 4516.92 crore in Q1 June 2016 over Q1 June 2015. The core operating profit rose 3.27% to Rs 3558.19 crore in Q1 June 2016 over Q1 June 2015. The figure of core operating profit is arrived at after deducing trading income from operating profit.
On absolute basis, Axis Bank's gross non-performing assets (NPA) edged higher to Rs 9553.17 crore as on 30 June 2016 from Rs 6087.51 crore on 31 March 2016 and Rs 4251.18 crore as on 30 June 2015. The ratio of gross NPA to gross customer assets edged higher to 2.54% as on 30 June 2016 from 1.67% as on 31 March 2016 and 1.38% as on 30 June 2015. The ratio of net NPA to net customer assets edged higher to 1.08% as on 30 June 2016 from 0.7% as on 31 March 2016 and 0.48% as on 30 June 2015.
Axis Bank attributed increase gross and net NPA to slippages from its watch list loans. As on 30 June 2016, loans outstanding on the bank's watch list reduced 10% over the previous quarter and stood at Rs 20295 crore. The reduction in the watch list primarily represents slippages to NPAs amounting to Rs 2680 crore, which comprises 92% of the total corporate credit slippages. The bank's provision coverage ratio declined to 69% as on 30 June 2016 from 72% as on 31 March 2016.
The cumulative value of net restructured assets as on 30 June 2016 stood at Rs 7363 crore, constituting 1.99% of net customer assets, compared to Rs 8072 crore, constituting 2.25% of net customer assets as on 31 March 2016.
The bank's advances grew 21% year-on-year (YOY) to Rs 3.44 lakh crore as on 30 June 2016. Retail advances grew 24% YOY and stood at Rs 1.43 lakh crore, constituting 41% of the net advances of the bank. Corporate credit grew 21% YOY and stood at Rs 1.58 lakh crore, constituting 46% of net advances. SME advances grew 13% YOY and stood at Rs 43611 crore as on 30 June 2016. Axis Bank said that the bank remains well capitalized to pursue growth opportunities.
Vedanta and Cairn India will be in focus after Vedanta sweetened the terms of the deal for the merger of Cairn India with Vedanta. As per the revised terms of the merger deal, the public shareholders of Cairn India will receive one equity share of Vedanta for each share held in the company. Additionally, the public shareholders of Cairn India will get four 7.5% redeemable preference shares (RPS) of Vedanta of the face value of Rs 10 each with tenure of 18 months for each share held in Cairn India. As per the original terms of the deal announced in June 2015, Cairn India shareholders were to get one equity share of Vedanta for each share held in the company and one 7.5% redeemable preference shares (RPS) of Vedanta of the face value of Rs 10 each with tenure of 18 months for each share held in Cairn India. The recent commodity price environment has further strengthened the strategic rationale for the merger, the two Vedanta group companies said in a joint statement.
Following completion of the transaction, Vedanta plc ownership in Vedanta is expected to decrease to 50.1% from its current 62.9% shareholding. Cairn India minority shareholders will own 20.2% and Vedanta minority shareholders will own 29.7% stake in the merged entity. Sudhir Mathur, CFO and Acting CEO of Cairn India said in a statement that Cairn India shareholders will benefit from exposure to a diversified portfolio of world-class, low cost, long-life assets of Vedanta. Tom Albanese, CEO of Vedanta said that the strategic rationale for merging Vedanta and Cairn India remains highly compelling. Diversified resources companies have delivered superior returns for shareholders historically, Albanese said.
Rallis India's consolidated net profit rose 310.9% to Rs 174.20 crore on 45.4% rise in total income to Rs 610.31 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours on Friday, 22 July 2016.
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