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Axis Bank posts fiscal Q2 loss due to tax expenses

India's Axis Bank Ltd. swung to a net loss in the quarter ended Sept. 30, driven by a one-time tax expenses.

The private sector lender reported fiscal second-quarter consolidated net loss of 215.8 million rupee, or a loss of 8 paisa per share, compared to a profit of 8.78 billion rupees, or 3.41 rupees per share, in the year-ago quarter. On a stand-alone basis, the bank's loss was 1.12 billion rupees, or a loss of 43 paisa per share, compared to a profit of 7.90 billion rupees, or 3.07 rupees per share.

The bank said the net loss was driven by one-time expenses of 21.38 billion rupees from the writedown of deferred tax assets due to a change in corporate tax rate.

The bank's net interest income grew year over year to 61.02 billion rupees from 52.32 billion rupees. Net interest margin improved to 3.51% in the fiscal second quarter from 3.40% at the end of June and from 3.36% at the end of September 2018.

On a consolidated basis, investment income rose to 28.79 billion rupees from 28.06 billion rupees. Other income totaled 41.73 billion rupees, compared to 29.87 billion rupees. Other income includes gains from securities' transactions, fees earned from providing services to customers, selling of third-party products and ATM sharing fees.

Total income grew to 198.86 billion rupees from 165.22 billion rupees.

Net provisions and contingencies, other than taxes, swelled to 35.80 billion rupees from 29.76 billion rupees, the bank said.

As of the end of the period, the bank's gross nonperforming assets ratio clocked in at 5.03%, compared to 5.96% at the end of the prior-year period. Its net NPA ratio was 1.99% as of Sept. 30, compared to 2.54% as of Sept. 30, 2018. Under Basel III, the bank's capital adequacy ratio improved to 18.23% as of Sept. 30 from 16.17% in the year-ago period.

As of Oct. 21, US$1 was equivalent to 70.89 Indian rupees.