Axis Bank`s June quarter shows growth sparks but fresh stress appears too

At a time when there is a broad-based economic slowdown, growth in lending is hard to come by

In that scenario, Axis Bank Ltd’s swift turnaround to a robust core income growth, driven by a 19% increase in domestic loans, should cheer investors.

The fact that this growth comes in tandem with a reduction in the private sector lender’s toxic loan pile is an added positive. Indeed, the management said the bank is not chasing extraordinary growth, but would rather lend to good borrowers, a message given by most other private-sector lenders that have announced results so far.

This preference for safety is writ large over the Axis Bank’s balance sheet. Loan growth is driven by retail; small businesses, especially the dealership network of the automobile sector, have been avoided. Another safety net provisions, which rose 14% from a year ago, despite the toxic loan stockpile reducing in the June quarter.

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