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Axis Bank Ltd. plans to raise as much as ₹35,000 crore ($4.6 billion) after slumping to a loss due to additional provisions against potential defaults stemming from the coronavirus outbreak.
The Mumbai-based lenders provisions surged 185 per cent to ₹7,730 crore for the quarter ended March 31 from a year earlier, it said in a stock exchange filing on Tuesday. Of this, ₹3,000 crore are for Covid-19 related exposures.
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The banks board approved the fundraising, which will take place through the sale of bonds, including possibly foreign currency notes.
The virus will be a headwind for the year started April 1 and provisions will increase materially, Chief Executive Officer Amitabh Chaudhry said on a briefing call. He said the bank will further tighten risk controls when deciding on new loans.
Axis Bank joins peers including Kotak Mahindra Bank Ltd. in seeking additional funds as lenders prepare for the fallout of a rare economic contraction in India. The world’s strictest shelter-at-home restrictions are hurting business activity and while regulators permitted loan-repayments to be frozen for three months, authorities also asked banks for additional provisions.
Kotak Mahindra Bank last week announced plans to issue about $1 billion of new shares to bolster capital buffers.
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