Axis Bank – Annex to RAR

PART V: ANNEX to RAR

(All figures in the Annex are in mn)
Note: All figures except percentage may be rounded off. Percentage may be shown in decimal (2
digits)

Annex 1: Major Areas of Financial Divergence #

Table-VI: Claims Not Acknowledged as Debt

(Amt in ₹ mn)
Details of Non- Acknowledged
Provision Remarks
Debts
Held Required Shortfall
The bank has to make provisions for NIL 3 3 In all cases, the
the following legal cases filed in the consumer fora/ civil court
Consumer forums/ Civil Court: has passed the order
1. M/s Sumitra D S Motors – against the bank, and
Shahajahanpur the bank has filed an
2. – appeal. However, taking
in view the consideration
3. - Cards that the appellate
authority may also pass
4. – Hissar the judgement against
5. – the bank when a forum
Sriganganagar has already passed the
6. judgement against the
– Patan bank, the bank may
7. – Suri make the additional
8. provision of ₹ 3 mn for
– Kalol these 10 legal cases.
9. – Ghaziabad
10. SBI, Nasik - Nashik-115

Table-VII: Standard Asset Provision

(Amt in ₹ mn)
Standard Out Provision Remarks
Assets-Portfolio Standing
details Held Required Shortfall
The bank had made provision
Standard for standard restructured
Restructured 4069 4618 549 advances only for restructured
Advances facilities and not for all the
facilities of the borrower.
Total 4069 4618 549

1
 Axis Bank – Annex to RAR

Table-X: Divergence in RWA

(Amt in ₹ mn)

Particulars
As per bank As per SSM Shortfall Remark
Bank was putting other loans
(overdrafts-others at
concessional risk weights of
Credit Risk – RWA 2932924 2933173 249 75, instead of 100). Personal
loans were added into
regulatory retail portfolio.
Market Risk – RWA 253418 253418 - -
Operational Risk – RWA 265662 265662 - -
Total RWA 3452004 3452253 249

2
 Axis Bank – Annex to RAR

Table-XI: Priority Sector Classification

(Amt in ₹ mn)
Amount reported by Misclassific Actual
Sl. bank ation Achievement Reasons for
Parameters Shortfall
No identified as assessed declassification
Target Achieved by SSM by SSM
(1) Accounts with
limit more than Rs.
2 crore to
corporates- ₹ 582
mn as per Para 1.1.2
of MC on; PSL dated
July 01, 2014.
1 Direct Agri. 257302 142384 662 141722 -114918 (2) Loans with limit
more than Rs. 50
lakhs against
warehouse receipts
- ₹ 80 mn as per Para
1.1.1(iv) of MC on
PSL dated July 01,
2014.
(1) The bank has
considered loans to
large market
federations / state
civil supplies
corporations - ₹ 4269
mn as per Mail Box
clarification dated
Feb 22, 2011.
(2) Accounts of
corporates with
sanctioned limits
more than Rs. 2
2 Indirect Agri. 85767 36397 3868 32529 -49370 crore re-classified
from Direct Agri. to
Indirect Agri. - Rs.
521 mn as per Para
1.1.2 of MC on PSL
dated July 01, 2014.
(3) Loans with limit
more than Rs. 50
lakhs against
warehouse receipts
- Rs 120 mn as per
Para 1.2.1 (ii) of MC
on PSL dated July 01,
2014.

3
 Axis Bank – Annex to RAR

(1) Accounts with

limit more than Rs
5 crore classified
under SME
(Services) - Rs
6474 mn as per Para
2.1.2 of MC on PSL
dated July 01, 2014.
(2) Accounts of
corporates with
sanctioned limits
more than Rs. 2
crore re-classified
from Direct Agri. to
3 SME 284787 6293 278494 SME - Rs. 61 mn
as per Para 1.1.2 of
MC on PSL dated July
01, 2014.
(3) Loans with limit
more than Rs 50
lakhs against
warehouse receipts
reclassified as
SME from Indirect
Agri. - Rs 120 mn
as per Para 1.2.1 (ii)
of MC on PSL dated
July 01, 2014.
(1) Accounts with
purpose other than
housing / repair /
construction - ₹ 71
mn as per Para 4 of
MC on PSL dated July
01, 2014.
4 Housing 224062 508 223554 (2) More than one
Housing Loan (359
accounts)
sanctioned to the
188 borrower - ₹ 437
mn as per Para 4 (i)
of MC on PSL dated
July 01, 2014.
(1) 97 accounts
with purpose other
than study /
education - ₹ 27 mn
as per Para 3 of MC
on PSL dated July 01,
2014.
5 Education 641 38 603
(2) 98 accounts (48
borrowers) where
education loans
have been given
more than once - ₹
11mn as per Para 3
of MC on PSL dated
4
 Axis Bank – Annex to RAR

July 01, 2014.

PTC
6 Investments 8258 8258
Eligible
Deposits
7 with 124508 124508
NABARD
8 Others 14534 14534
TOTAL 835571 11369 824202

As per Bank As per SSM

Adjusted Net Bank Credit (Previous Year) 1905941 1905941

5
 Axis Bank – Annex to RAR

Annex 2: Computation of Outside Liabilities

(Amt in ₹ mn)
Sr.
Particulars Amount
No.
A Total Liabilities excluding capital & reserves as
4,204,644
on March 31, 2015
Upper Tier II Instruments 16,195
Subordinated debt 112,008
Deposits 3,224,419
Borrowings 669,380
Other liabilities and provisions 182,642
B Internal Liabilities 60,213
Provision for standard assets 15,956
Provision for diminution in fair value of
3,425
restructured accounts
Provision for NPAs 24,818
Floating provision 33
Provision for NPI 2,105
Provision for depreciation in investments 723
Provision for fraud and other contingencies 12,171
Balance in sundry liabilities interest capitalization account 982
C Total outside liabilities [A-B] 4,144,431

6
 Axis Bank – Annex to RAR

Annex 3: Assessed Net Worth

(Amt in ₹ mn)
Sr.
Particulars Amount
No.
A Paid up capital [including ESOP outstanding & interest
4,741
free funds from H.O. (foreign banks)]
B Reserves and Surplus 442024
Statutory Reserve 85,313
Share Premium 1,63,741
Capital Reserve (excluding revaluation reserve) 10,480
Special Reserve -
Revenue Reserve -
General Reserve 3,543
Investment Allowance Reserve 1290
Remittable surplus retained in Indian books [Foreign banks] -
Credit Balance in P&L A/c 1,76,235
Foreign currency Translation Reserve (FCTR) 1,398
Reserve Fund 24
C Intangible assets (including net deferred tax assets) &
18,869
accumulated losses
D Reported net worth [A+B-C] 4,27,896
E Adjustments following inspection findings 3240
Additional Provision for Non-Performing Investments 0
Additional Loan Loss Provision 0
Shortfall in Restructured Standard Asset Provisioning 549
Net Deferred Tax Asset 0
Understatement of Liabilities 0
Claims Not acknowledged as Debt 3
Any other Item to be specified (Investment Allowance
2688
Reserve and FCTR)
F Assessed net worth or real/exchangeable value of paid
424656
up capital and reserves [D-E]

7
 Axis Bank – Annex to RAR

Annex 4: Computation of Assessed Capital

Sr. Particulars / Items Eligible amount

No.

Computation of Common Equity Tier 1 capital (CET1)

A Common Equity Tier 1 capital (CET1): instruments and 444077

reserves before regulatory / supervisory adjustments
B Total regulatory adjustments / deductions 27267

C Reported Common Equity Tier 1 capital (CET1) [A - B] 416810

D Adjustments / deductions applied on CET 1 following 552

Inspection for Supervisory Evaluation (ISE) findings under
RBS
1 Additional Loan Loss Provision 0

2 Shortfall in Standard Asset Provisioning 549

3 Understatement of Liabilities 0

4 Net Deferred Tax Asset 0

5 Investment Reserve Account 0

6 Non-Performing Investments 0

7 Claims Not acknowledged as debt 3

E Assessed Common Equity Tier 1 capital (CET1) [C – D] 416258

Computation of Additional Tier 1 capital (AT1)

F Additional Tier 1 capital (AT1) : instruments before 3269

regulatory adjustments
G Total regulatory adjustments to Additional Tier 1 capital 10198

H Reported AT1 capital [F - G] -

I Adjustments / deductions applied on AT1 following ISE 0

findings
1 Net Deferred Tax Assets 0

8
 Axis Bank – Annex to RAR

2 Any other item to be specified 0

J Assessed AT1) capital [H - I] 0

Computation of Tier 1 Capital (T1)

K Reported Tier 1 (T1) capital [C + H] 416810

L Assessed Tier 1 capital (T1) [E + J] 416258

Computation of Tier 2 Capital (T2)

M Tier 2 capital: instruments and provisions 108119

N Tier 2 capital: regulatory adjustments 3881

O Reported Tier 2 capital [M - N] 104238

P Adjustments / deductions applied on T2 following ISE (-) 549

findings
1 Add: Additional Standard asset provisions (-) 549

2 Any other item to be specified 0

Q Assessed Tier 2 (T2) capital [O - P] 104787

Computation of Total Capital (TC)

R Reported Total capital (TC) [K + O] 521048

S Assessed Total capital (TC) [L + Q] 521045

Risk Weighted Assets (RWAs)

T Risk Weighted Assets in respect of Pre-Basel III Treatment 1098

U Risk Weighted Assets (RWAs) 3452004

V Reported Total Risk Weighted assets 3452004

W Adjustments / additions applied on RWAs following 249

Inspection for Supervisory Evaluation (ISE) findings under
RBS
1 Additional RWAs 172

2 Any other item to be specified( Personal loans under RR) 77

X Assessed RWAs [V + W] 3452253

9
 Axis Bank – Annex to RAR

Capital Ratios / Summary

AA Reported Common Equity Tier 1 (CET1) Ratio [C/V*100%] 12.07%

BB Reported Tier 1 (T1) or Core Capital Ratio [K/V*100%] 12.07%

CC Reported Tier 2 (T2) Capital Ratio [O/V*100%] 3.02%

DD Reported Total capital (TC) Ratio or CRAR [R/V*100%] 15.09%

EE Assessed Common Equity Tier 1 (CET1) Ratio [E/X*100%] 12.06%

FF Assessed Tier 1 (T1) or Core Capital Ratio [L/X*100%] 12.06%

GG Assessed Tier 2 (T2) Capital Ratio [Q/X*100%] 3.03%

HH Assessed Total capital (TC) Ratio or CRAR [S/X*100%] 15.09%

10
 Axis Bank – Annex to RAR

Annex 5: Assessment of Internal Generation of Capital

Break-up of income and Current FY T FY T-1 FY T-2

Sr.
No expenditure (Mar 15) (Mar-14) (Mar-13)

Total Interest/discount Income

1 354,786 3,06,411 2,71,826
(2+3+4+5)

2 Interest/discount on advance/bills 258,678 2,19,504 1,91,662

3 Income on investments 91,171 83,431 77,470

4 Interest on balances with RBI - - -

Interest on market lending/

5 Income on other interest earning 4,937 3,476 2,694
assets

Fee based & stable misc.

6 61,361 54,081 50,399
income [6(a)+6(b)

6a Fee based income 61,211 53,938 50,251

6b Misc. income from stable sources 150 143 148

7 Gross stable income (1+6) 416,147 3,60,492 322,225

8 Interest Expended (9+10) 212,544 1,86,895 1,75,163

Interest on deposits/ all other

9 171,368 1,54,589 1,50,155
interest expense

10 Interest on borrowings 41,176 32,306 25,008

11 Net Stable Income (7-8) 203,603 1,73,597 1,47,062

12 Income from trading 9,949 3,276 5,863

13 Realised gains on derivatives 9,841 15,177 6,641

14 Gains on sale of asset 398 -348 -103

15 Recovery from w/offs 1,699 1,839 2,685

Extra-ordinary income/ Dividend

16 income & other miscellaneous 402 28 26
income

11
 Axis Bank – Annex to RAR

Gross volatile income

17 22,289 19,972 15,112
(12+13+14+15+16)

Provisions and contingencies

18 11,354 11,879 8,895
(excluding tax) (19+20+21)

19 Provisions for Loan losses 5,954 3,764 3,182

Provisions for depreciation in

20 -510 -1,003 -1,039
investments/NPI

21 Other provisions 5,910 9,118 6,752

22 Extra-ordinary expenses 0 0 0

23 Write-offs 11,932 9,196 8,610

Net Volatile Income (17-18-22-

24 -997 -1,103 -2,393
23)

Assessed provision by
25 supervisor 552 231 1439
(26+27+28+29+30+31+32+33)

26 Additional Provisions for frauds 0 0 0

Additional Provisions for

27 0 193 1364
understatement of NPAs

Additional Provisions for

28 0 0 0
Understatement of NPIs

Additional Provisions for

29 0 0 0
Understatement of Liabilities

Additional Provisions for claims

30 3 12 30
not acknowledged as debt

Additional Other Provisions

31 (Shortfall in Standard Asset 549 0 0
Provisioning)

Additional Other Provisions

32 0 26 45
(Other Assets)

Additional Other Provisions (Pl.

33 0 0 0
specify)

12
 Axis Bank – Annex to RAR

Assessed net volatile Income

34 -1,549 -1,334 -3,832
(24-25)

Reported net total income

35 202,606 1,72,494 1,44,669
(11+24)

Assessed net total income

36 202,054 1,72,263 1,43,230
(11+34)

Operational expenses
37 92,037 79,008 69,142
(38+39+40)

Staff expenses, Director’s

38 fees/Board Members’ fees & 31,167 26,024 23,785
expenses

Depreciation on bank’s property

39 11,380 9,897 9,376
and repairs

40 Other Operating Expenses 49,490 43,087 35,981

41 Provisions for tax 36,990 31,310 23,733

42 Reported profit (35-37-41) 73,578 62,176 51,794

43 Assessed profit (36-37-41) 73,026 61,945 50,355

44 Dividend paid (excluding tax) 10,934 9,414 8,441

Reported Retained Earnings

45 62,644 52,762 43,353
(42-44]

Assessed Retained Earnings

46 62,092 52,531 41,914
(43-44)

13
 Axis Bank – Annex to RAR

Earnings Stability / Volatility Assessment

Sr. Earnings / Profit Ratios Current FY T FY T-1 FY T-2

No (Mar 15) (Mar-14) (Mar-13)

47 Net Interest Income [1-8] (NII 19.02% 23.64% 20.56%

Growth Rate)
48 Share of Interest, Fee and Volatile
80.92:14.00:5.08
Income [1:6:17] 80.54:14.21:5.25 80.58:14.94:4.48

49 Gross Stable Income / Interest

195.79 192.88 183.96
Expended [7/8*100%]

50 Net Stable Income / Assessed

Profit [11/43*100%] 278.81% 280.24% 292.05%

51 Gross Volatile Income / (Provisions

& Contingencies + Extraordinary
95.72 94.77 86.33
Expenses + Write-offs)
[17/(18+22+23)*100%]

52 Assessed Net Volatile Income /

Assessed Profit [34/43*100%] -2.12% -2.15% -7.61%

53 Reported Retained earnings /

Reported Profit [45/42*100%] 85.14% 84.86% 83.70%

54 Assessed Retained earnings /

Assessed Profit [46/43*100%] 85.03% 84.80% 83.24%

55 Actual vs budgeted income

-2.85% -2.09% -1.31%
[expressed as +ve / -ve percentage]

56 Actual vs budgeted profit [expressed

0.19% -1.59% 0.07%
as +ve / -ve percentage]

14
 Axis Bank – Annex to RAR

Annex 6: Leverage Ratio under Basel III

Sr. Particulars Reported by Assessed by

No. Bank SSM
A Basel III Tier 1 Capital (T1) 416,810 416,258

B Leverage Ratio Exposures 5,511,563 5,511,011

On balance sheet (excluding derivatives

4,532,879 4,532,879
and Securities Financing Transactions

Derivatives 173,311 173,311

Securities Financing Transactions 86,445 86,445

Off-balance sheet exposures 747,856 747,856

Any other component -28,928 -29,480#

C Leverage Ratio (A/B*100%) 7.56% 7.55%

# Regulatory adjustments made to Tier 1 capital.

15