Bandhan Bank on Saturday reported an 80% dip in its March quarter net profit to ₹103 crore, as it wrote off a huge portfolio of loans in the flagship microlending business by recognising stress upfront.
The bank’s post-tax profit for FY21 also reduced by 27.1% to ₹2,205 crore as a result of the hit to the business in the last quarter.
MD and CEO C. S. Ghosh said the bank wrote off ₹1,929 crore of loans, a bulk of them in the microfinance segment, in the March quarter because it wanted to start the new fiscal with a clean balance sheet.
As a result of the accelerated write-off, the bank’s overall provisions shot up to ₹1,594 crore from the year-earlier period’s ₹827 crore, which had a direct impact on the profit line. Operating profit, which is arrived at by excluding the provisions, was up 13% to ₹1,729 crore.
Additionally, Bandhan Bank restructured over ₹600 crore of advances.