Expect credit cost normalisation in second half of FY19: Axis Bank's CFO

Jairam Sridharan

CFO | Axis Bank

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Axis Bank reported a sharp rise in bad loans with slippages in the second quarter crossing Rs 8,900 crore. In an interview to CNBC-TV18, Jairam Sridharan, CFO of Axis Bank spoke about the results and his outlook for the bank.

In the last two quarters we had credit cost in the range of 180-190 bps, said Sridharan, adding that in this quarter the Reserve Bank of India (RBI) divergence related credit cost have led to an increase to 316 bps of which about 140 bps comes from the divergence, so we are very much in the range.

"We expect credit cost normalisation in the second half of financial year 19," he added.

Talking about Insolvency and Bankruptcy Code (IBC), he said in the first list of 12 accounts, we have exposure on 8 accounts with a total exposure of  about Rs 5,000 crore.

I do not know the total number of accounts that are out on the second list but we have 12 accounts from that and we have about Rs 2,000 crore of exposure there, so total of about Rs 7,000 crore of exposure and against Rs 7,000 crore we have made provision of Rs 3,800 crore. We took an additional Rs 505 crore of provision on that pool in this quarter, he mentioned.

We expect the bank to grow about 5-6 percentage points faster than the market. The market has grown about 6-7 percent and we are growing at 16, so we are doing fairly well from guidance perspective, Sridharan added.