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Axis bank better placed than ICICI and other PSU Banks

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Nomura reports reveal that Axis bank is better placed than ICICI and other public sector bank in terms of corporate book profitability.

axis bank

Flash points                                 

  • Global financial services firm Nomura said that the third largest private sector bank in India-Axis bank is better placed than ICICI and other PSU’s in terms of corporate book profitability
  • About 20-25% of Axis bank’s corporate books are stressed
  • But it is much lower than that of ICICI
  • In ICICI Bank the bad bank was available at 5x times the book value
  • Axis Bank’s bad book is 75-1.0x book
  • Previously, profitability of Axis Bank’s corporate book has been high versus ICICI corporate book ROEs of just 12-13 per cent told Nomura
  • Axis bank’s share value range between 470-540
  • Though the stressed value of Axis bank is lower than ICICI it is just marginally lower compared to the PSU banks
  • Nomura also expects the NPA levels in the corporate book to inch up to 14-15 per cent of corporate loans
  • Axis bank’s retail and SME book will continue to deliver ROEs of 18-20 per cent told Nomura