During the June quarter, Axis Bank’s provisions came down to Rs 386.60 crore from Rs 712. 25 crore a year earlier, despite a rise in gross non-performing assets (NPAs). The gross NPA ratio increased both sequentially and on a year-on-year basis, to 1.34 per cent as compared to 1.10 per cent last year and 1.22 per cent at the end of the March quarter.

“The decline in provisions was mainly a result of depreciation and also because of the fact that the investment was much higher last year. Also, we got a write back this year,” said Somnath Sengupta, executive director & head-Corporate Centre, Axis Bank.

The bank has guided for gross stress addition of Rs 6,500 crore for FY15, of which Rs 1,100-crore additions were made in the quarter ended June. The lender did not sell any bad loans to ARCs in the first quarter.

Infra bonds Following the central bank's incentive to raise long-term funds, Axis Bank on Tuesday said it is planning to float infrastructure bonds. “We will look at the option of infrastructure bonds issuances as they look attractive,” Sengupta said.

RBI has announced that long-term bonds (tenor of more than seven years) will be exempt from cash and statutory reserve requirements if the proceeds are used to fund new long-term infrastructure projects and affordable housing. Also, the loans funded via this process will be exempt from the computation of adjusted net bank credit for the purpose of calculating priority sector lending requirements.

The pressure on the corporate banking business might continue for another couple of quarters.“Corporate banking business has been slow but we are hoping that it will see pick up but that will be towards the later part of this financial year or in FY16,” Sengupta said.

Net interest income or the difference between the interest earned and interest expended was up 16 per cent to Rs 3,310 crore in the first quarter of this financial year as compared to Rs 2,865 crore in the same period last year.

The share of current and savings account deposits or the low cost deposits was at 40 per cent as on end June this year.

During the June quarter, Axis Bank’s provisions came down to Rs 386.60 crore from Rs 712. 25 crore a year earlier, despite a rise in gross non-performing assets (NPA). The gross NPA ratio increased both sequentially and on a year-on-year basis, to 1.34 per cent as compared to 1.10 per cent last year and 1.22 per cent at the end of the March quarter.

At the end of the June quarter, the bank’s capital adequacy ratio was 16.09 per cent (including the net profit for the first quarter), according to Basel-III norms, while its tier-I capital adequacy ratio was 12.64 per cent.

Rahul Shah,vice-president -Equity Advisory Group, Motilal Oswal Securities, agreed that the results were broadly in line with expectations. “Over last three quarters, profitability of the bank was helped by, repatriation of profits from international subsidiaries which could further aid earnings,” he added.