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**AXSB has higher exposure to small, medium enterprises and the infra segment v/s its peers.

With the
uncertain macro environment, tight liquidity and higher interest rates, stress in this segment has
increased more than in other sectors, making AXSB more vulnerable to asset-side shocks.


**capital adequacy ratio (CAR): The ratio is a metric of the bank's capital with respect to its risk-
weighted assets.

Tier-1 capital + Tier-2 capital/Risk weighted assets

tier one capital, which can absorb losses without a bank being required to cease trading, and tier two
capital, which can absorb losses in the event of a winding-up and so provides a lesser degree of
protection to depositors.

Risk weighted assets mean fund based assets such as cash, loans, investments and other assets. Degrees
of credit risk expressed as percentage weights have been assigned by RBI to each such assets.

Existing Banks 09 %
New Private Sector Banks 10 %
Basel III norm: only 8% required


**Led by strong growth in retail loans (carrying 75% risk weights) ratio of risk weighted assets to total
assets at end-FY13 declined to 75.9%, compared to 81.1% in FY12. This is the reason for shift to retail in
strategy.. to better manage CAR.


** Contribution of top four NPA accounts increased to 39.2%, compared to 32.2% in FY12 and 18% in
FY11.


**Non performing asset: Interest and/ or installment of principal remain overdue for a period of more
than 90 days in respect of a term loan


**Concentration mix improved marginally with TOP 20 depositors and exposures forming 13.9% from
an earlier 14.1% and 11.8% from an earlier 12.3%


**Assets of mid-corporate group increased 15.2% YoY to INR200b and form 6% of total assets.


**Fees grew just 6% YoY to INR14.3b. Corporate banking fees was muted YoY (up 12% QoQ) and
treasury fees grew 6% YoY.


**Bank has sufficient asset cover for its project loans and power loans
Of the overall power segment exposure 86% is towards power generation (private sector). No
exposure to SEB
39% of the loans comprise of operational projects; and of the remaining 61% - 32% of will become
operational by FY14, further 54% by FY15 and rest of 14% in FY16 and thereafter


**Corporate loan (49%) break up large corporate 26% mid-corporate 10% and infra 12%. 20% of
the corporate exposure is towards project finance

** Due to macroeconomic uncertainty deposit rate outspaced loan rate hence stress developed, FCNR
remained major source of income


**Growth in large and mid corporate (48% of total loans) segment was muted at 3% YoY and flat QoQ.
Share of retail and SME loans has increased to 45% in 3Q v/s 41% a year ago.

**On back of difficult macro-economic environment, corporate loan and fee income growth is
moderating and we expect trend to continue over the next few quarters. While fee income growth is
moderating, flexibility on opex shall help to sail through without much moderation in earnings.


**