Axis Bank on Tuesday reported an overall loss of Rs 1,387 crore for the quarter ending March 31, opposed to overall profit of Rs 1,505 crore during the corresponding period last year. A report in the Economic Times blamed the losses on the rise in provisions and contingencies, which shot up to 185 per cent year-on-year (YoY) to the tune of Rs 7,730 crore in the fourth quarter.
A provision is an amount put aside to cover a future liability. A contingency, on the other hand, is the fund set aside for dealing with a negative event such as a recession.
The losses in the last quarter were reported despite a 19 per cent increase in net income, which grew to Rs 6,808 crore. The bank's operating profit also registered a rise of 17 per cent (year-on-year) to Rs 5,851 crore.
Significantly, the bank also reported a drop in the non-performing assets (NPAs), which declined from 2.06 per cent in the previous quarter to 1.56 per cent in the period ending March.