AgenciesKolkata: Bandhan Bank has lowered its Covid-related risk projections with repayment collection showing steady improvement over the last six months giving the lender confidence about further recovery and asset quality strength.
The bank said it has made additional Covid-related provision of Rs 2100 crore covering 2.8% of its portfolio, and it might not need to top it up substantially going forward if the current repayment trend continues, bank chief executive Chandra Shekhar Ghosh told ET.
During the initial days of the pandemic, the lender thought of creating an additional provision buffer of 3.5% of its loan book.
At the end of September, it has Rs 76615 crore as loan outstanding including Rs 5000 crore of off-balance sheet exposure.
The bank's total repayment collection in value terms has reached 92% by September while it was 89% for microfinance customers, which constitutes nearly two-third of its loan portfolio.
Bandhan's chief financial officer Sunil Samdani said that there may not be any "material need for additional provision" in the next two quarters as the bank expects the repayment trend to improve further.
For the quarter to September, its net profit fell 5% at Rs 920 crore as compared with Rs 972 crore in the year ago period, due to higher provision and higher employee cost. The Kolkata-based lender has made an additional provision of Rs 300 crore in anticipation of Covid-19 related loss in the quarter, taking its total provision and contingencies for the period to Rs 395 crore as against Rs 146 crore in the year ago period.
Its operating profit grew 25% at Rs 1628 crore against Rs 1307 crore over the same period with asset quality showing improvement. Gross non-performing assets ratio fell to 1.2% at the end of September from 1.8% while net NPA improved to 0.4% from 0.6%.
The bank has decided to begin retail lending in two-wheeler and personal loan segments. Its 1045 bank branches which have so far been busy in mobilising deposits would now start retail lending in two-wheeler, consumer durable and personal loans.
The bank is also doing a pilot run in 10 of its 3461 microcredit outlets to begin the retail vertical. Ghosh said these microcredit outlets will henceforth also be used to mobilise deposits from the country's rural belt.
The bank said it has made additional Covid-related provision of Rs 2100 crore covering 2.8% of its portfolio, and it might not need to top it up substantially going forward if the current repayment trend continues, bank chief executive Chandra Shekhar Ghosh told ET.
During the initial days of the pandemic, the lender thought of creating an additional provision buffer of 3.5% of its loan book.
At the end of September, it has Rs 76615 crore as loan outstanding including Rs 5000 crore of off-balance sheet exposure.
The bank's total repayment collection in value terms has reached 92% by September while it was 89% for microfinance customers, which constitutes nearly two-third of its loan portfolio.
Bandhan's chief financial officer Sunil Samdani said that there may not be any "material need for additional provision" in the next two quarters as the bank expects the repayment trend to improve further.
For the quarter to September, its net profit fell 5% at Rs 920 crore as compared with Rs 972 crore in the year ago period, due to higher provision and higher employee cost. The Kolkata-based lender has made an additional provision of Rs 300 crore in anticipation of Covid-19 related loss in the quarter, taking its total provision and contingencies for the period to Rs 395 crore as against Rs 146 crore in the year ago period.
Its operating profit grew 25% at Rs 1628 crore against Rs 1307 crore over the same period with asset quality showing improvement. Gross non-performing assets ratio fell to 1.2% at the end of September from 1.8% while net NPA improved to 0.4% from 0.6%.
The bank has decided to begin retail lending in two-wheeler and personal loan segments. Its 1045 bank branches which have so far been busy in mobilising deposits would now start retail lending in two-wheeler, consumer durable and personal loans.
The bank is also doing a pilot run in 10 of its 3461 microcredit outlets to begin the retail vertical. Ghosh said these microcredit outlets will henceforth also be used to mobilise deposits from the country's rural belt.
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