Bandhan Bank registers 36% growth in net profit on higher business growth

Riding on the back of higher business growth and an improvement in collection efficiency, Bandhan Bank registered around 36 per cent growth in net profit at ₹859 crore for the quarter ended December 31, 2021, against ₹633 crore in the same period last year.

On a sequential basis, the bank has witnessed significant improvement in profits. It had posted a net loss of ₹3,009 crore during the second quarter of this fiscal (July-September 2021) on the back of a higher provisioning.

According to Chandra Shekhar Ghosh, Managing Director and CEO of Bandhan Bank, compared to the challenging first half of the fiscal, the third quarter has been good across all parameters, including asset quality, higher credit demand and improved collection efficiency.

Collection efficiency

The bank’s overall collection efficiency, excluding NPA, improved to 96 per cent during the quarter under review against 88 per cent during Q2 FY22, while the same, including NPA, improved to 91 per cent against 81 per cent during the previous quarter (Q2 FY22). While the collection efficiency of Assam improved significantly from 67 per cent in Q2 FY22 to 91 per cent in Q3 FY22, for West Bengal, it improved from 86 per cent to 96 per cent during the same period.

“After a challenging last two quarters, we have been able to arrest our gross non-performing asset. Many of our customers have also regularised their overdue accounts. We expect a strong decline in gross NPA numbers moving forward,” said Ghosh at a virtual press conference on Friday.

On a sequential basis, the bank’s gross NPA as a percentage of its advances remained stable at 10.81 per cent during the quarter under review compared to 10.82 per cent during Q2 of this fiscal. However, on a year-on-year basis, it was significantly higher compared to 1.11 per cent in the same period last year. Net NPAs stood at 3.01 per cent against 0.26 per cent in the same period last year.

The bank did not undertake any restructuring done during the quarter. Despite technical write off of ₹1,200 crore during the quarter, PCR improved marginally to 74.4 per cent during the quarter, up from 74.1 per cent as on September 30, 2021.

The bank remains confident that the third wave would not impact its business operations, said Ghosh.

Net interest income

Net interest income improved by around three per cent at ₹2,125 crore during the quarter under review against ₹2,072 crore last year. Other income grew by 27 per cent at ₹712 crore (₹562 crore). Operating profit for the quarter increased by around one per cent at ₹1,950 crore against ₹1,923 crore in the corresponding quarter of the previous year.

Net interest margin (annualised) for the quarter ended December 31, 2021, stood at 7.8 per cent against 7.6 per cent in September 30, 2021.

Total advances grew by around 10 per cent at ₹87,998 crore (₹80,255 crore) while deposits increased by nearly 19 per cent at ₹84,499 crore (₹71,188 crore).

CASA (current account savings bank account) grew by 26 per cent YoY and stood at 45.6 per cent against 42.9 per cent YoY.

The bank’s capital adequacy ratio stands at 20 per cent. “Q4 historically has been the best quarter for the bank and we are positive of our business going forward. With group loan share in total advances reduced to 52 per cent, it is on track to achieve the diversification strategy which it had laid down for FY25,” said Ghosh.

The bank’s scrip closed at ₹295.05, down by 1.55 per cent on the BSE on Friday.