Bandhan Bank Q1 net profit falls 31.6% to Rs 549.82 cr on Rs 750-cr Covid-related provisions

The bank’s total deposits increased 35.3% to Rs 60,610 crore as on June 30 compared to Rs 44,796 crore as on the same date last year.

Private sector lender Bandhan Bank on Wednesday reported a 31.58% year-on-year (y-o-y) fall in net profit to Rs 549.82 crore in the first quarter of the current financial year, on the back of Rs750-crore Covid-19-related provisions on standard assets.

The Kolkata-headquartered lender had posted a net profit of Rs 803.62 crore in the corresponding quarter of the previous fiscal year.

Sequentially, the bank had made a profit of Rs 517.28 crore in the fourth quarter of FY20, when it had made a provision of Rs 690 crore against the potential impact of the pandemic.

After the aggregate additional provisions of Rs 1,440 crore in the two quarters, the bank made additional standard asset provision on microfinance portfolio at 0.75%, amounting to Rs 329 crore. “These aforesaid provisions, held by the bank, aggregate to Rs 1,76,900 lakh. These provisions held by the bank are higher than the minimum requirement as prescribed by RBI,” Bandhan Bank said in a stock exchange filing.

Commenting on the performance, the bank’s managing director and CEO, Chandra Shekhar Ghosh, said, “During the quarter, we have started collections post unlocking announced by the government. Overall bank collections improved to 76% by the end of June, compared to 29% in April. We continued to showcase the strengths of our retail deposit franchise with strong growth of 35% during this difficult time, especially CASA growing by over 47%.”

The bank’s total deposits increased 35.3% to Rs 60,610 crore as on June 30 compared to Rs 44,796 crore as on the same date last year. Its total advances (on book + off book + targeted long-term repo operations) grew 17.68% to Rs 74,331 crore in the June quarter this financial year against Rs 63,164 crore in the corresponding quarter of the last fiscal year.

During the June quarter, the bank’s net interest income (NII) — the difference between interest earned and interest expended — rose 15% yoy to Rs 1811.52 crore, compared to Rs 1574.55 crore in the same quarter last fiscal year. Non-interest income was also up by 16.84% yoy to Rs 386.76 crore, compared to Rs 331.02 crore in the same period of FY20. Net interest margin (NIM) for the quarter ending June 30, 2020, stood at 8.2%, down 4 basis points (bps) from 8.6% on June 30, 2019.

Provisions and contingencies of the lender witnessed nearly seven-fold y-o-y increase to Rs 849.06 crore, compared with Rs 125.36 crore in the same quarter last financial year. Its gross non-performing assets (NPAs) ratio at the end of the June quarter stood at 1.43% — 5 bps down from 1.48% at the end of the March quarter last fiscal year. The net NPAs ratio also decreased by 10 bps, sequentially, to 0.48% from 0.58% as on March 31, 2020.

On Wednesday, Bandhan Bank’s scrip fell 0.78% to end the day at Rs 349.65 on the Bombay Stock Exchange.