Bandhan Bank's net profit more than doubles to Rs 731 crore in Q3

Bandhan Bank’s net profit more than doubled in the third quarter of financial year 2019-20 (Q3FY20) to Rs 731 crore, largely driven by interest income. This was higher than the net profit of Rs 331 crore it reported in the year-ago period on a standalone basis.

Sequentially, net profit declined 24.79 per cent as it registered a profit of Rs 972 crore in Q2. To be sure, the Q3 figures are not comparable with the corresponding figures of the previous year after the merger of Gruh Finance, which came into effect on October 17, 2019.

The net interest income of the bank in Q3FY20 stood at Rs 1,541 crore. In the same period last year, the net interest income of the bank was Rs 1,124 crore. Total income increased to Rs 3,075.31 crore in the quarter under review as against Rs 1,883.65 crore in the year-ago period, Bandhan Bank said.

The gross non-performing assets (GNPA) stood at 1.9 per cent in Q3 as opposed to 2.4 per cent in the same period last year. In Q2FY20, GNPA stood at 1.8 per cent. The increase in GNPA quarter-on-quarter (qoq) is partly because of increase in Gruh’s housing loan portfolio thanks to change in recognition norms as applicable to bank from housing finance firm.

Q3 Results

“Following the unrest in Assam in the past few months, the collection efficiency of Assam was recorded at 93.64 per cent as opposed to a national average of 98.01 per cent. In Assam, the efficiency had gone down to 78 per cent for a span of three weeks in the quarter during the unrest but it soon recovered to 93 per cent,” Chandra Shekhar Ghosh, managing director and chief executive of Bandhan Bank, said.

“Although the bank has not recognised substantial slippage from the microfinance book in Assam, they have made additional provision of Rs 200 crore on standard assets after evaluating risk observed in certain areas of the northeastern state,” the bank said.

As of December 2019, the microfinance portfolio of the bank reduced to 61 per cent from 87 per cent the year before. Total loans and advances of the private lender stood at Rs 65,456 crore as on December 31, 2019 against Rs 35,999 crore as of December 2018, thereby registering a growth of 83.87 per cent. On a standalone basis, the credit growth has been 33 per cent for the bank because of the conservative approach the bank has taken with the slowdown in the economy, Ghosh said.

Deposit accretion also continued to remain healthy at 58.5 per cent year-on-year growth at Rs 54,908 crore. There is also a continued focus on garnering low cost deposit leading to 130 basis points (qoq) improvement in CASA (current account savings accounts) ratio to 34.3 per cent.

On reducing promoter stake, Ghosh said, “There is no timeline. However, we are planning to reduce it as early as possible”. Shares of Bandhan Bank closed 1.03 per cent up at Rs 518.95 on the BSE.