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

Click on the attachment to read the full report:

Motilal Oswal Bandhan Bank Result Update.pdf

DISCLAIMER

This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

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

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.