Bandhan Bank Q2 net profit falls 5% to Rs 920 cr as provisions rise

Private sector lender Bandhan Bank on Monday reported a 5.3% year-on-year (y-o-y) fall in net profit to Rs 920.01 crore for the second quarter because of an additional Rs 300 crore Covid- related provisions on standard assets. The lender had posted a Rs 971.79-crore net profit in the second quarter of the last financial year. It had made Covid-related provisions of Rs 1,440 crore up to June 30.

Total provisions and contingencies of the lender rose 171.05% year on year (YoY) to Rs 394.51 crore during the second quarter this fiscal year compared to Rs 145.55 crore in the same quarter last financial year. Operating profit for the quarter increased 24.6% YoY to Rs 1,627.5 crore against Rs 1,306.9 crore in the corresponding quarter of the last financial year.

Net interest income (NII) for the quarter grew 25.77% to Rs 1923.09 crore against Rs 1529.04 crore in the same quarter of FY20. Net interest margin (NIM) for the quarter ending September 30,2020, stood at 8%, down 2 basis points (bps) from 8.2% on September 30, 2019.

Commenting on the performance, the bank’s MD and CEO, Chandra Shekhar Ghosh, said, “As the (loan) moratorium ended on August 31, 2020, coupled with robust rural performance, we have seen an all-round improvement in collection, disbursement and deposits.”

On deposits front, the bank had witnessed the “best-ever quarter” whereas on the disbursement front, the lender was close to the pre-Covid level. “Collections have seen a steady improvement month on month and is expected to reach near normal in the next 90 days. We now look forward to accelerate the business in H2FY21,” Ghosh added.

Total advances (on book + off book +TLTRO) grew 19.4% to Rs 76,614.6 crore as on September 30, 2020, against Rs 64,185.5 crore as on September 30, 2019. Total deposits increased 34.4% to Rs 66,127.7 crore as on the same date, compared to Rs 49,195.2 crore as on September 30,2019. Its micro-banking collection efficiency in September stood at around 89%, while it was 91% in October.

To a question, Sunil Samdani, the bank’s chief financial officer, said the bank was emphasising on improving its collection efficiencies further and not focussing on loan restructuring at the moment. According to him, the bank’s total outgo on account of ex-gratia payment of interest-on-interest for the moratorium period for eligible borrowers could be around Rs 150 crore.

The lender was planning to add another 574 branches by this fiscal-end, Ghosh said, adding these new branches would be added primarily in the South, North and Western parts of the country.