Axis Bank: Sub-investment grade assets may keep bad loans elevated

Sub-investment grade assets may keep bad loans elevated

Even after higher recognition of non-performing assets (NPAs or bad loans) in the March 2018 quarter, it may be early to say that the asset quality pain for Axis Bank is over. The stock is down 4.8 per cent in 2018, when Nifty Bank and Sensex are up 4-5 per cent. Analysts say, the bank’s exposure to sub-investment grade assets is still high and could be a source of bad loans in the near-term.

No doubt, the balance sheet clean up in the March 2018 quarter — mainly due to the Reserve Bank of India’s (RBI) new NPA framework —- reduced