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<ul><li><keyword id="6355975" type="COMPANY" weightage="20" keywordseo="axis-bank">Axis Bank</keyword>’s share price is up by over 6% in early morning trade.</li><li>The jump in stock value comes after the bank revealed that its moratorium book was only 9.7% of the total portfolio in terms of value. </li><li>Axis Bank has also built up buffers to the tune of $900 million to address stressed assets and COVID-19 contingency.</li></ul>Axis Bank’s share price rallied over 6% in early morning trade, reacting to its Q1 earnings posted last evening. The primary concern over asset quality was assuaged when the bank disclosed that only 9.7% total portfolio consisted of loans that had opted for the Reserve Bank of India’s (RBI) moratorium. <div type="image" title="axis bank stock price (1)" msid="77100086" hostid="261" caption="&amp;lt;p&amp;gt;Axis Bank stock price surges by over 6%&amp;lt;/p&amp;gt;"></div> Analysts are now positive about Axis Bank’s growth and have increased their earnings estimates based on the bank’s strong net interest income (NII) growth and sequential decline in provisions. <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Brokerage </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Target Price </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Motilal Oswal Securities </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹ 600 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">IDBI Capital </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹ 530 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">HDFC Securities </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹ 565 </td></tr></tbody></table> 90% of the customers who opted for the second moratorium are the same as the ones who opted for the first moratorium. Nonetheless, management said that Axis Bank remains cautious which is why it has a provision buffer of nearly $900 million and is building up a solid war chest. <div type="Article" hostid="261" msid="77086850" title="Axis Bank has set aside over $900 million fearing COVID-19 may sour loans" mstype="2" mssubtype="0"></div> In June, 80% of corporate clients and 70% of customers in retail who had opted for the moratorium successfully paid the interest on their loans. The bank’s Gross Non-Performing Assets (GNPA) ratio and Net Non-Performing Assets (NNPA) ratio has also improved over last quarter. <div type="image" title="Axis bank GNPA NNPA" msid="77100109" hostid="261" caption="&amp;lt;p&amp;gt;Axis Bank&amp;#39;s GNPA and NNPA ratios over the last five quarters&amp;lt;/p&amp;gt;"></div> This has helped boost the provisions coverage ratio (PCR) to 75%, an increase of 576 basis points (bps) over the last quarters. A hundred bps make up 1%. “Post near term stress taking shape, we expect the book to normalize and improve thereon,” said IDBI Capital’s review. SEE ALSO: <a href="https://www.businessinsider.in/finance/banks/news/axis-bank-has-set-aside-over-900-million-fearing-covid-19-may-sour-loans/articleshow/77086850.cms">Axis Bank has set aside over $900 million fearing COVID-19 may sour loans</a> <a href="https://www.businessinsider.in/stock-market/news/hdfc-bank-share-price-rises-on-bond-issue-and-increase-in-provision/articleshow/77061426.cms">HDFC Bank is beefing up capital and provision to cushion a spike in bad loans post moratorium — and that’s helping its share price</a>

Axis Bank share price surges over 6% after earnings reveal that only 9.7% of its loans are exposed to the moratorium

New Delhi, Jul 2 () Axis Bank on Thursday said it has decided to wind down its UK subsidiary and the move will not have any material impact on its financial position. The lender has been reviewing its international strategy and as part of this, has adopted a clear objective to focus on the Indian banking market and harness the potential there, it said in a regulatory filing. "In line with the said objective, the bank has taken a decision to fully wind down and close the operations of Axis Bank UK Ltd, a subsidiary of the bank and targeting for surrendering of the banking licence by end of April 2021, which has been reviewed with the UK regulators viz. both the Prudential Regulation Authority and the Financial Conduct Authority," it said. As an organisation, the bank is committed to delivering optimum value for all its stakeholders, in sync with its core principles and the local policies as applicable. The bank will ensure transparency and fairness in dealing with all its employees and customers of Axis Bank UK Ltd throughout this winding down process, it said further. "Kindly note that Axis Bank UK Limited is not a material subsidiary of the Bank, in terms of the Listing Regulation and that the above decision will not have any material impact on the operations or the financial position of the Bank," it said. Axis Bank stock settled at Rs 423.55 on the BSE, down 2.24 per cent from the previous close. KPM KPM ANU ANU

Axis Bank to wind down UK subsidiary

<keyword id="6355975" type="CITY" weightage="80" keywordseo="Axis-Bank">Axis Bank</keyword> and <keyword id="6653" type="CITY" weightage="80" keywordseo="ICICI-bank">ICICI Bank</keyword> share a similar profile in terms of corporate exposure and funding roads, power companies, etc, still there could be a divide emerging between the two. 
 
The stock performance of the two banks clearly point out the divide as the latest quarter financial performance indicate investors believe that Axis Bank is better place than ICICI. 
 The past year saw Axis outperform ICICI by a huge margin. Axis rose 68.71% in the past year when compared with ICICI, which gained 12.23%. The broader BSE <keyword id="54657" type="CITY" weightage="60" keywordseo="Bankex">Bankex</keyword> rose 21%. 
 
ICICI Bank's March quarter earnings rose 10.2% to Rs 2,922 crore, while Axis reported an 18.36% advance to Rs 2,180.6 crore. 
"Axis' earnings growth for the past few quarters has been at 18% while that of ICICI Bank has been at around 10%. Its growth is almost double, which is driving investors to the stock," Vaibhav Agrawal, Vice President research - banking at Angel Broking told Economic Times, adding "Axis Bank's asset quality has been steady while ICICI Bank has seen a rise in its net nonperforming loans. This has also been a positive for Axis Bank." 
 
Meanwhile, Anish Tawakley, analyst with Barclays, said for ICICI Bank, the slippages from the restructuring book are very high as loan exposures come out of the moratorium. 
 
"In large corporates, there can be some lumpy accounts. Even if the economy picks up, they can see stress as they are highly leveraged,” he told ET. 
Even though Axis and ICICI apparently emerged from their past issues - partly created by the economic slowdown that saw bad loans of the industry's largest bank rise to 1.40% of total assets - investors seem to choose former over latter. 
 
"As far as the impact of NPA additions is concerned, as the bank has previously explained, the higher slippages to NPA have come mainly from the existing restructured portfolio; hence the impact on NII and margins is not significant," an ICICI Bank spokesman told the financial daily. 
 Both ICICI and Axis are run by chips of the same block - <keyword id="45875" type="PERSON" weightage="80" keywordseo="Chanda-Kochhar">Chanda Kochhar</keyword> and <keyword id="6356453" type="PERSON" weightage="80" keywordseo="Shikha-Sharma">Shikha Sharma</keyword> - who rose up the ranks at ICICI under KV Kamath. 
 
The newspaper reported that Sharma, who spent almost three decades at the ICICI Bank Group before moving to head Axis Bank in 2009, showed some aggressive management style by buying Enam Securities for Rs 2,070 crore, while Kochhar spent steadying the ship by pulling back funds from overseas businesses. 
 
"Asset quality continues to be challenging due to the tough operating environment and the economic recovery being slower and volatile," Kochhar said during the post-earnings call. In the past few years, she said. 
 
Kochchar added that restructuring was done keeping in mind assumptions of a possible turnaround in the economy. "But the pick-up in economic activity has been gradual and volatile affecting these companies. Asset quality in 2016 will be better than last year," said Kochhar. 
 
"The asset quality environment continues to be challenging with economic activity being weak," V Srinivasan, executive director at Axis Bank, told ET, adding, “We will have to monitor our exposure."

Indian investors are cozying up to Axis bank. Know why

New Delhi, Jan 15 () Markets regulator Sebi has rejected Axis Bank's plea to allow the lender to invoke the pledge on shares in the Karvy Stock Broking Ltd (KSBL) matter.
The order comes after the Securities Appellate Tribunal (SAT) on December 20 had asked Sebi to pass an order by January 15, 2020 in the case. The tribunal had modified its earlier directive passed on December 17, wherein it had asked the markets watchdog to pass an order within 15 days in the case.
Axis Bank had moved SAT seeking the shares pledged by KSBL to the lender be unfrozen, so that it can invoke the pledges. The move had come following a Sebi directive to the National Securities Depository Ltd (NSDL) in November that prevented Axis Bank from accessing the securities pledged with the lender by KSBL.
KSBL owed Rs 81 crore to the bank which was given in the form of overdraft against shares.
As per the data provided by NSE, securities pledged by KSBL in favour of Axis Bank belonged to its fully paid as well as partly or unpaid clients. The value of securities belonging to fully paid client is Rs 171.74 crore and the value of securities of other than fully paid clients is Rs 13.69 crore. 
 Regarding pledging of securities of fully paid clients, Sebi said a stock broker has no authority to pledge the securities of its fully paid clients. If a broker pledges securities of its fully paid clients, it amounts to misappropriation of clients' securities. 
"Even if securities belonging to fully paid clients are pledged by the stock broker, such pledge does not pass any title to the pledgee, as the stock broker in such case himself/itself does not possess any title/right over such securities. Thus, pledge of securities, belonging to fully paid client, is not treated as valid pledge in law," Sebi noted.
 "Pledging of securities of unpaid clients required taking of 'explicit authorization' by the stock broker from each such client and in respect of each such pledging. The Representor (Axis Bank) has submitted that the PoA (power of attorney) given by the client was sufficient authorization to create such a pledge. However, I do not agree with such interpretation given to the scope of PoA," Sebi Whole Time Member Anant Barua said in an order on Tuesday.
He further said PoA given by the client to the broker can be used for the purpose of pledging in favour of the stock broker, "only" for the purposes of meeting the margin requirements. 
 The bank in its representation to Sebi also said in respect of partly or unpaid clients, KSBL be directed to issue five days notice to the clients or the bank be allowed to issue five days notice to clients to enable the clients redeem the pledged shares by making payment of the corresponding outstanding indebtedness, failing which the lender be permitted to invoke the pledge on shares. 
 If the bank is able to show proof of authorisation in respect of securities having value of Rs 13.69 crore belong to unpaid clients, such securities can be released to it after following the procedure under supervision of NSE, Axis Bank said in its submission.
The regulator has rejected Axis Bank's plea in the matter.
 Sebi, through an interim order passed on November 22, barred KSBL from taking new brokerage clients and also prevented it from using the PoAs given by its clients after the brokerage was found to have allegedly misused clients' securities to the tune of over Rs 2,000 crore.
Securities held by KSBL were used by the brokerage for borrowing from the lenders courtesy the PoA.
The securities held by over 83,000 clients were given back to them after Sebi asked NSDL to do so, forcing lenders -- Bajaj Finance, ICICI Bank, HDFC Bank and IndusInd Bank -- to move SAT and secure an interim relief on further transfers. 
 However, SAT on December 4 refused any immediate relief to top lenders and directed them to approach Sebi by December 6 and that Sebi pass an order.
NSDL's move helped 90 per cent of KSBL's demat account holders get back their securities.
Later, Sebi refused to provide any relief to the four lenders. 

 SP ANU
ANU

Sebi rejects Axis Bank's plea in Karvy Stock Broking matter

Mumbai, Apr 28 () Private sector lender Axis Bank on Tuesday formally joined peers to have a life insurance joint venture by announcing to raise its stake in Max Life Insurance, the fourth largest player in the life cover space, to 30 per cent for Rs 1,592 crore. The deal, which comes during bleak economic times as the country grapples with the impact of COVID-19 pandemic, was struck due to the opportunity in the life insurance space and also the price at which it could be sealed, Axis Bank's managing director and chief executive Amitabh Chaudhry said. Other large lenders, including HDFC Bank, ICICI Bank and SBI, and also smaller ones have life insurance joint ventures or have promoted companies themselves. According to experts, banks originate a lot of insurance business and "manufacturing" products is more rewarding than merely selling them. India's third largest private sector lender Axis Bank, which already has a minor 1 per cent ownership of the insurer, used to sell Max's policies for over a decade, which has seen 19 lakh customers and over Rs 38,000 crore in premium generated, Chaudhry said. A senior Axis Bank official said the deal includes picking up over 55 crore shares of the insurer at Rs 28.61 per unit, which takes the total deal consideration to Rs 1,592 crore, and underlined that the final figure may wary a bit depending on the date of deal closure. The deal requires nods from the Reserve Bank, Insurance Regulatory and Development Authority and Competition Commission of India, and will take up to six to nine months to consummate. When asked about the timing of the deal, Chaudhry defended the move pointing out to the "big opportunity" that is presented by the life insurance sector and the potential for the upside on the investment presented by the price at which it is signed. It can be noted that the Reserve Bank is pushing lenders not to declare dividends to conserve capital and deploy it for fresh lending, which will be necessary to kickstart the economy once the lockdown ends. Chaudhry said the Max stake buy will dent its overall capital adequacy, which stood at a comfortable level of over 17 per cent, by only 0.10 per cent. Max Life Insurance is a part of the listed Max Financial Services Ltd (MFSL), a diversified financial services company. In a regulatory filing, Max said that the consideration payable by Axis Bank for purchase of the shares shall be arrived basis the valuation of Max Life conducted as per Rule 11UA read with Rule 11UAA of the Income-tax Rules, 1962. Upon the closing of the deal, MFSL will have the right to nominate four directors on the Max Life board, while Axis Bank will have the right to nominate three directors. One nominee director of the promoter group on the board of MFSL shall be a person identified by Axis Bank. Chaudhry denied speculation about the stake being raised in the future by the bank, including murmurs of a complete takeover, saying there are no such plans. At present, products sold through the bank reportedly contribute for 54 per cent of Max Life's revenues. On February 20, a tri-party agreement was signed between Axis, MFSL and Max Life to explore the possibility of a long-term strategic partnership between Axis Bank and Max Life. At present, MFSL holds 72.5 per cent stake in Max Life and Japan-based Mitsui Sumitomo Insurance (MSI) owns 25.5 per cent stake. The proposed transaction with Axis Bank follows the ongoing swapping by MSI of 20.6 per cent stake that it holds in Max Life with a 21.9 per cent stake in MFSL, an official statement said. "MFSL also plans to purchase MSI's balance stake in Max Life. Post completion of the series of transactions, Max Life will become a 70:30 joint venture between MFSL and Axis Bank," it explained. Against the 30 per cent stake, Axis Bank's name will be included in Max Life's tag line. It is to be noted that Max Life had made an attempt to merge with HDFC Life in 2017 which failed as they did not receive regulatory approval due to reported complexity of the deal. Interestingly, the deal was then brokered by the then HDFC Life CEO Amitabh Chaudhry who is now the CEO of Axis Bank. Following failure of the deal, Max Group made several attempts to sell part of its stake. However, it did not meet success. MFSL shares gained 5.14 per cent to close at Rs 475.80 apiece on the BSE, while Axis Bank stock surged 6.61 per cent to close at 455.55 per unit, as against gains of 1.17 per cent on the benchmark. AA DP MKJ

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Axis Bank share price surges over 6% after earnings reveal that only 9.7% of its loans are exposed to the moratorium

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Axis Bank to wind down UK subsidiary

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Indian investors are cozying up to Axis bank. Know why

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Sebi rejects Axis Bank's plea in Karvy Stock Broking matter

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Axis Bank to buy 29% stake in Max Life for Rs 1,592 crore

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