Bandhan Bank Q3 Review - Asset Quality Deteriorates; Assam Woes Hit Collections: Motilal Oswal
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Motilal Oswal Report
Bandhan Bank Ltd. reported a weak quarter, with net earnings falling sharply below estimates, affected by provisions of Rs 10 billion predominantly towards rising asset quality concerns in the Assam portfolio.
However, operating performance remains strong, led by higher net interest income as margin improved 30 basis point QoQ, while asset under managements grew at 23% YoY.
Liability traction was robust at 30% YoY. On the asset quality front, the pro-forma gross non-performing asset/net non-performing asset ratio increased to ~7.1%/2.36%, with 0dpd of ~76.5%.
Collection efficiency in Assam dropped by 1,000 basis point to 78% during January 01-16, 2021.
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