Mumbai, Apr 21 (UNI) Leading Private Bank Axis Bank today said the mark to market (MTM) loss in 188 outstanding derivative transactions, structured by Banks, amounted to Rs 673.55 crore.
The derivatives transactions, which it had structured for companies, included various types of cross-currency options and swaps.
In addition, there were 70 similar transactions, in which companies had an aggregate MTM profit of Rs 8.67 crores, the Bank said in a release announcing the results for fiscal 2008.
Of the 188 outstanding transactions, 113 pertained to forex derivatives, in which the companies had an aggregate MTM loss of Rs 547.72 crores. In addition there were 36 similar transactions in which companies had an aggregate MTM profit of Rs 6.48 crores.
In transactions, in which there have been MTM losses, six transactions have been repudiated by two customers, involving an MTM loss to the companies of Rs 71.97 crores. The Bank was contesting legally, the cases filed by these companies and as a measure of prudence, the Bank has made contingent provisions of Rs 71.97 crores (implying a full provision for the MTM losses of the two companies). In terms of RBI guidelines, any such outstanding contract would be classified as an Non Performing Asset (NPA), 90 days after there is a default in a payment to be made to the Bank. None of these transactions have turned into NPAs.
Referring to its overseas operations, the Bank said it had no Collateralised Debt Obligations (CDOs) and no Credit Default Swaps (CDSs). It had a portfolio of USD 153 million of Credit-Linked Notes (CLNs), constituting the credits stripped from convertible bonds, issued overseas by Indian Companies. As at end-March 2008, the CLNs had a depreciation of USD 5.09 million, which has been fully provisioned in terms of RBI guidelines.
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