Private sector lender Axis Bank Ltd on Tuesday reported 18.8 per cent year-on-year drop in profit for the first quarter ended June 30, owing to higher provisions booked in the current quarter.

The bank’s ‘other income' also fell as Covid-19 related lockdown has disrupted normal banking activities. Other income constitutes gains from securities' transactions. commission earned from guarantees/letters of credit, fees earned from providing services to customers, selling of third-party products, ATM-sharing fees, recoveries from written off accounts etc.

Net profit for the first quarter of fiscal 2020-21 fell to Rs 1,112.17 crore, from Rs 1.370.08 crore in the year-ago quarter. In the fourth quarter, the bank however, had booked loss of Rs 1,387.78 crore.

Other income fell to Rs 2,586.68 crore, from Rs 3,868.76 crore in the year ago quarter.

Gross non-performing assets (GNPA) stood at 4.72 per cent, compared with 5.25 per cent in the year ago quarter and 4.86 per cent in the fourth quarter. Net profit margin was 1.23 per cent, against 2.04 per cent in the year-ago quarter and 1.56 per cent of net advances in the fourth quarter.

Provisions rose to Rs 4,416.42 crore in the first quarter under review, vis-a-vis Rs 3,814.58 crore in the year ago quarter and Rs 7,730.02 crore in the fourth quarter.

The bank said in its filings with exchanges that profit for the quarter fell by Rs 209 crore as it changed accounting for its investments.

The bank has extended moratorium of three to six months to its borrowers as per RBI guidelines, and the provisions held by the bank are in excess of RBI-prescribed norms, it said.

“The extent to which the COVID-19 pandemic will impact the Bank's operations and asset quality will depend on the future developments, which are highly uncertain, including among the other things any new information concerning the severity of the COVID-19 pandemic and any action to contain its spread or mitigate its impact whether government mandated or elected by the Bank,” it said in its filings.

The capital adequacy norm of the bank stood at 17.29 per cent.

The bank’s results were declared after market hours. On Tuesday, the bank’s stock had closed at Rs 446.20 a piece on BSE, up 2.86 per cent from its previous close.