Axis Bank Creates Rs 2,001 Crore Provision Buffer for Identified Pool of Assets

Axis Bank Clarifies Provisioning Buffer

Axis Bank has clarified the purpose of the one-time provisioning buffer it set aside for the March quarter, stating that it was created against an identified pool of assets and does not reflect any underlying asset quality stress.

The lender emphasized that the provisioning buffer was a risk-based approach to creating a portfolio-based provision, where an identified underlying pool was the basis for the creation of this provision. The bank's managing director and chief executive officer, Amitabh Chaudhry, highlighted that this approach was not a reflection of any asset quality deterioration.

In terms of its loan book, Axis Bank noted that overseas loan exposures, or non-rupee loans, account for just about 4% of its overall loan book. These exposures are largely short duration and extended to Indian corporates.

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The bank had earlier announced an additional one-time provision of Rs 2,001 crores during the quarter, based on its assessment of the broader macroeconomic conditions and geopolitical uncertainties. This provision was described as precautionary and does not represent any asset quality deterioration.

In its earnings report, Axis Bank reported a flat profit figure for the March quarter at Rs 7,071 crore, as compared to Rs 7,117 crore in the previous corresponding period. The bank also declared a dividend of Rs 1 per share for FY26.