Axis Bank misses Q1 profit estimates due to higher provisions

Axis Bank Q1 earnings: Axis Bank, one of country’s leading private lender, reported a first-quarter profit on Wednesday that fell short of analyst expectations due to increased provisions.

The Mumbai-based bank's standalone net profit, excluding its subsidiaries, rose 4 per cent year-on-year to Rs 6,035 crore for the quarter ending June 30. This was below Rs 6,450 crore profit anticipated by analysts, according to LSEG data.

Provisions and contingencies, funds set aside for potential bad loans, almost doubled to Rs 2,039 crore. Banks typically increase these reserves to cover potential bad loans and unforeseen events.

Axis Bank's net interest income, the difference between interest earned and interest paid, increased by about 13 per cent to Rs 13,448 crore.

However, the bank's non-performing assets (NPA) ratio, a critical measure of asset quality, rose to 1.54 per cent at the end of June from 1.43 per cent three months earlier, indicating a deterioration in asset quality.

(With Reuters inputs)