Axis Bank Limited · NSE:AXISBANK
Axis Bank — Corporate Update (April 2016)
6 slides from Axis Bank's corporate update, April 2016
Slide 1: Corporate Lending Watch List
Corporate Lending Watch List Sources of potential stress April 2016
Slide 2: The Bank has created a Watch List of potential stress in corporate lending
The Bank has created a Watch List we believe could be the key source of future stress in corporate lending book Sectoral exposure mix Disclosed separately by disclosed by the Bank as Stressed Leveraged the Bank in the past part of Investor sectors groups presentation Watch List Inconsistent Project
Slide 3: The Watch List was created out of a two-step process
The Watch List was created out of a two-step process STEP 1: Rule-based filters STEP 2: Judgmental short-listing Rules on Borrower Characteristics: (Sector, group level leverage …) All Rules on Loan Account by Corporate Characteristics: account Watch Loan (project progress, assessment of List Accoun
Slide 4: Outstanding on Watch List accounts at end of Q4 FY16 was around `22,600 crores
The Bank’s outstanding on Watch List accounts at the end of Q4 FY16 was around `22,600 crores Watch List `22,628 cr As % of Corporate Assets1 As % of Total Customer Assets2 As % of Total Assets 13% 6% 4% Q4 FY16 Q4 FY16 Q4 FY16 1 Corporate Advances + Credit Substitutes 2 Advances + Credit Substitute
Slide 5: Some color on composition of the Watch List
Some color on composition of the Watch List When did Watch List outstanding % Outstanding on Watch List originate? Sectoral composition of Watch List By loan type Top 10 Sectors 7% 79% 100% 19% 24% 23% -3% 13% Projects Operating 7% 6% 6% 5% 5% 4% 4% Businesses Constr… 3% 17% CRE Cement Iron & Power
Slide 6: Expected Losses and Provisioning
Expected Losses and Provisioning • We expect ~60 % of the Watch List accounts to flow into NPA over the next 8 quarters • While timing of slippage is difficult to predict precisely, we expect that there would be a slight bias towards H1 FY17. • We expect to retain Provision Coverage Ratio above 70%