Bandhan Bank Q4 Results: Profit Falls On Higher Provisions, Asset Quality Improves
The lender’s net profit fell 25.8 percent year-on-year to Rs 517.3 crore.
Bandhan Bank Ltd.’s quarterly profit declined after it set aside additional provisions to mitigate the Covid-19 impact even as its bad loans fell.
The lender’s net profit fell 25.8 percent year-on-year to Rs 517.3 crore in the quarter ended March, according to an exchange filing. That compares with the Rs 731-crore consensus estimate of analysts tracked by Bloomberg. The bank had reported a net profit of Rs 650.87 crore in the year-ago quarter.
Bandhan Bank’s net interest income, or core income from operations, rose 33.5 percent on a yearly basis to Rs 1,680 crore.
Asset quality, too, improved. Gross non-performing assets ratio stood at 1.48 percent compared with 1.93 percent in the previous quarter. Net NPA ratio was at 0.58 percent versus 0.81 percent last quarter.
Bandhan Bank nearly tripled its provisioning during the quarter to Rs 827.4 crore. Of this amount, Rs 690 crore is additional provisions on standard assets on account of the Covid-19 pandemic.
“This provision is higher than the RBI’s minimum required provision,” it said in a press release. “With this provision and additional standard assets provision that the bank is carrying in micro-banking portfolio, total additional provision in books stands at Rs 1,000 crore.”
Total deposits increased 32 percent year-on-year. Loan portfolio, on and off-book, rose 60.46 percent.
Chandra Shekhar Ghosh, managing director and chief executive of the bank, said the quarter has been “satisfying” given the challenges they faced. “During the quarter, the bank has showcased the strengths of its deposit franchise with continuously growing deposits in all the segments.”
Shares of Bandhan Bank fell 2.36 percent before the results were announced, compared with the 0.6 percent drop in the benchmark BSE Sensex.