Axis Bank posts surprise loss as tax expense surges

Bloomberg

Axis Bank Ltd posted an unexpected quarterly loss due to a one-time income tax adjustment.
It reported a loss of 1.12 billion rupees ($16 million) in the three months ended on September 30, down from a profit of 7.9 billion rupees a year earlier and compared with a 9.05 billion rupees average of analyst estimates compiled by Bloomberg.
The bank set aside 25.5 billion rupees towards tax expenses for the July-September quarter, sharply above 3.8 billion rupees a year ago. Excluding extraordinary items, profit was 20.26 billion rupees, the bank said.
“They have charged the entire net deferred tax to this quarter instead of amortising it over remaining quarters, and this is the reason for the surprise loss,” said Siddharth Purohit, a banking analyst at SMC Global Securities Ltd.
India’s third-largest private lender has come under investor scrutiny due to concerns about its exposure to the country’s troubled shadow banks and debt-laden corporates.
The bank’s gross bad loan ratio stood at 5.03% compared with 5.25% at the end of June. The bank had downgraded 22.4 billion rupees of its loans to below investment grade during the June quarter, taking the total to 75 billion rupees.