1. Axis Bank, ICICI Bank shares plunge, cause CNX Bank Nifty to log worst fall in 2-weeks

Axis Bank, ICICI Bank shares plunge, cause CNX Bank Nifty to log worst fall in 2-weeks

The CNX Bank Nifty registered its worst fall in two-weeks on Wednesday losing 351.3 points or 1.8% to close at 19,483.6, largely due to a 8.3% and a 3.7% drop in the shares of Axis Bank and ICICI Bank, respectively.

By: | Mumbai | Updated: October 27, 2016 8:35 PM

The Bank Nifty registered its worst fall in two-weeks on Wednesday losing 351.3 points or 1.8% to close at 19,483.6, largely due to a 8.3% and a 3.7% drop in the shares of Axis Bank and ICICI Bank, respectively.

The 8.3% fall in the shares of Axis Bank, which had announced its September quarter results after market hours on Tuesday, was the biggest in over a year. The bank had reported a 83% (y-o-y) drop in net profit to `319 crore in Q2FY17 as provisions it is required to set aside for non performing loans had jumped 71% (y-o-y) to `3,623 crore.

The reason behind this big jump in provisioning requirement was `8,772 crore worth of loans slipping and turning non performing during the quarter. The bank’s management said 83.1% of the fresh slippages during the quarter came from the ‘watch list’ it had earlier created.

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As a result, the bank’s watch list reduced by 32% (q-o-q) and stood at `13,789 crore at the end of September. After the declaration of Q1 results, Sridharan had said that only about 60% of the watch list would slip in to NPAs.

“We now believe that slippages from the watch list (`22,600 crore) will be more than the 60% that we had originally envisaged. A materially higher portion of the watch list could turn NPA by the end of FY18,” said Jairam Sridharan, chief financial officer of the bank.

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