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Informist, Thursday, Apr. 24, 2025

--Axis Bank: Stress in credit card book stabilising

--Axis Bank: Stress in personal loan book will take a few qtrs to normalise

--CONTEXT: Comments by Axis Bank's management in post-earnings analyst call

MUMBAI – The new methodology employed by Axis Bank to classify accounts is expected to bring down slippages in the financial year 2025-26 (Apr-Mar) as compared to FY25, the bank's management said in a post-earnings call with sectoral analysts Thursday. "We have tweaked how we classify assets at the margin, and that tweak is incremental and relates to some very specific asset outcomes like one-time settlements," the management said. "So we have tweaked those at the margin to make them more stringent, and are transparently calling out that that change is incremental to the change we had in FY25."

The management said the bank's provisioning policy continues to be conservative, "which means 100% provisioning for unsecured loans once classified", and that is the reason for the "qualitative" comment it offered, that the change in classification at the margin could impact FY26 slippages over FY25.

The management also said the stress in the bank's credit card portfolio is coming down, but stabilising the personal loans portfolio would take a few more quarters. "We took underwriting actions on the (unsecured loans) portfolio," the management said. "The early reads on those underwriting actions are positive, but the vintages have not matured enough for us to provide a constructive or concrete outlook on the personal loan portfolio."

Axis Bank reported fresh slippages of INR 48.05 billion in the March quarter, lower than the slippages of INR 54.32 billion it reported in the December quarter. The bank Thursday reported a net profit of INR 71.18 billion for Jan-Mar, beating analysts' expectations of INR 67.13 billion. On the National Stock Exchange, shares of Axis Bank ended flat at INR 1,207.10 on the National Stock Exchange. The bank detailed its results after market hours.  End

Reported by Kshipra Petkar

Edited by Rajeev Pai

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