Motilal Oswal: Bandhan Bank’s Liability Franchise Strong; Prudential Provisions To Aid Earnings 
A branch of Bandhan Bank Ltd. in the Prabhadevi area of Mumbai, India. (Photo: BloombergQuint)

Motilal Oswal: Bandhan Bank’s Liability Franchise Strong; Prudential Provisions To Aid Earnings 

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Motilal Oswal Report

Bandhan Bank has provided a high quantum of provisions toward Covid-19, which affected earnings, even as net interest income/pre-provision operating profit growth held strong. The bank now holds total Covid-19-related excess standard provisions of Rs 17.7 billion (2.5% of loans) for use toward higher delinquencies once the moratorium period ends. Collection trends in the Micro Finance Institutions portfolio are improving and stood at 73% (verses 70% as of July 3, 2020).

Deposit growth stood strong, with the current and saving account ratio improving further and retail deposit proportion being largely stable. Disbursements picked up in June 2020 and were largely lent to existing customers only. We expect credit cost trends to remain elevated at 2.4% for FY21E; the bank has already incurred approximately 1.2% of this in 1QFY21

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Motilal Oswal Bandhan Bank Result Update.pdf


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Also read: A Fourth Of Bandhan Bank’s Loans Continue To Be Under Moratorium: CEO CS Ghosh

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