Axis bank better placed than ICICI and other PSU Banks

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

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