Mumbai, Jul 21 (IANS): Axis Bank on Tuesday reported a decline of 19 per cent in its net profit for the first quarter (Q1) of 2020-21 due to accounting policy changes and creation of NII reserves.

The lender posted a net profit of Rs 1,112 crore net profit during Q1 from Rs 1,370 crore for the corresponding period of the previous fiscal.

"Adjusted for accounting policy changes and NII reserves created, the operating profit and PAT for the quarter would have been Rs 6,151 crore and Rs 1,626 crore, respectively, growing by 4 per cent and 19 per cent on a YoY basis, respectively," the bank said in a statement.

However, the bank's net interest income (NII) zoomed to 20 per cent to Rs 6,985 crore during the quarter from Rs 5,844 crore earned during the corresponding quarter of the previous year.

"Net interest margin for Q1FY21 was 3.40 per cent," the statement said.

According to the bank, 'Specific Loan Loss Provisions' for Q1FY21 was at Rs 3,512 crore, compared to Rs 2,886 crore in Q1 last year and Rs 4,204 crore in Q4FY20.

"The bank held additional provisions of around Rs 5,983 crore towards various contingencies at the end of Q4FY20. The Bank has made incremental provisions aggregating Rs 733 crore in Q1 FY21 towards Covid-19," the statement said.

"At June 30, 2020, the Bank holds in aggregate additional provisions of Rs 6,898 crore. It is pertinent to note that this is over and above the NPA provisioning included in our PCR calculations, and the 0.4 per cent standard asset provisioning requirement on standard assets."

In addition, the overall additional provisions held by the bank towards various contingencies together with the standard asset provisions, translate to a standard asset coverage of 1.56 per cent at June 30.

"On an aggregated basis, our provision coverage ratio stands at 104 per cent of GNPA at 30th June, 2020," the statement said.