Axis Bank shares declined 6.1 per cent as Rs 3,000 crore provisions in Q4 due to Covid-19
Published On: Wednesday, April 29, 2020 | By: Team KnowMyStock
Axis Bank shares declined 6.1 percent to Rs 427.5 on the BSE today, 29th April 2020 after the bank made massive Rs 7,730 crore provisions in the March quarter of FY20 (Q4FY20), of which Rs 3,000 crore worth provisions were due to coronavirus (Covid-19)-induced uncertainty. This pushed the bank in the red zone, with the lender posting a surprise Rs 1,388-crore net loss in the recently concluded quarter. At 10:10 am, the stock was trading 5 percent lower at Rs 432.35 apiece on the BSE, as against a 0.84 percent rise in the benchmark S&P BSE Sensex. Nearly 19.68 million shares have changed hands on the counter on the NSE and BSE at 10:20 am. Historically, Q4 is the first time since March 2018 that the bank has dipped into losses of this magnitude because of the provisioning cost. The September 2019 quarter’s loss was due to the adjustment of deferred tax assets.
Even if one tries to take comfort from the fact that Rs 3,000 crore were created towards "probable" Covid-related asset quality pressure, it doesn’t bode well as loan loss provisioning rose to Rs 4,204 crore in Q4FY20, from Rs 2,962 crore in Q3FY20. Also, when seen against the provisions made by HDFC Bank and IndusInd Bank towards Covid-related exigencies, Axis’ numbers are too high.
Tags: axis bankshares declined
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