The CNX Bank Nifty registered its worst fall in two-weeks on Wednesday losing 351.3 points or 1.8% to close at 19,483.6, largely due to a 8.3% and a 3.7% drop in the shares of Axis Bank and ICICI Bank, respectively.
The 8.3% fall in the shares of Axis Bank, which had announced its September quarter results after market hours on Tuesday, was the biggest in over a year. The bank had reported a 83% (y-o-y) drop in net profit to `319 crore in Q2FY17 as provisions it is required to set aside for non performing loans had jumped 71% (y-o-y) to `3,623 crore.
The reason behind this big jump in provisioning requirement was `8,772 crore worth of loans slipping and turning non performing during the quarter. The bank’s management said 83.1% of the fresh slippages during the quarter came from the ‘watch list’ it had earlier created.
As a result, the bank’s watch list reduced by 32% (q-o-q) and stood at `13,789 crore at the end of September. After the declaration of Q1 results, Sridharan had said that only about 60% of the watch list would slip in to NPAs.
“We now believe that slippages from the watch list (`22,600 crore) will be more than the 60% that we had originally envisaged. A materially higher portion of the watch list could turn NPA by the end of FY18,” said Jairam Sridharan, chief financial officer of the bank.
The 8.3% fall in the shares of Axis Bank, which had announced its September quarter results after market hours on Tuesday, was the biggest in over a year. The bank had reported a 83% (y-o-y) drop in net profit to `319 crore in Q2FY17 as provisions it is required to set aside for non performing loans had jumped 71% (y-o-y) to `3,623 crore.
The reason behind this big jump in provisioning requirement was `8,772 crore worth of loans slipping and turning non performing during the quarter. The bank’s management said 83.1% of the fresh slippages during the quarter came from the ‘watch list’ it had earlier created.
As a result, the bank’s watch list reduced by 32% (q-o-q) and stood at `13,789 crore at the end of September. After the declaration of Q1 results, Sridharan had said that only about 60% of the watch list would slip in to NPAs.
“We now believe that slippages from the watch list (`22,600 crore) will be more than the 60% that we had originally envisaged. A materially higher portion of the watch list could turn NPA by the end of FY18,” said Jairam Sridharan, chief financial officer of the bank.
Visit Us At
Zoid Research
Office 101, Shagun Tower
A.B. Commercial Road, Indore
Office 101, Shagun Tower
A.B. Commercial Road, Indore
Pin-452001
Mobile:
+91 9039073611
Email: info@zoidresearch.com
Mobile:
+91 9039073611Email: info@zoidresearch.com
Website: www.zoidresearch.com
No comments:
Post a Comment