Bandhan Bank Q1 results: Net profit falls 31.6%

Bandhan Bank reported 32 percent fall in first quarter net profit at Rs 550 crore as against Rs 804 crore in the year ago period due to seven times rise in provisions and contingencies while its overall repayment collection improved to 76 percent at the end of the reporting period.

Its operating profit rose 17 percent at Rs 1,584 crore against Rs 1,356 crore in the same period with net interest income growing 15 percent at Rs 1,811 crore (Rs 1575 crore). During the quarter it took accelerated additional provision on standard advances amounting to Rs 750 crore to cover the Covid-19-related credit risks. Total provisions stood at Rs 849 crore as against Rs 125 crore.

"We have taken an upfront hit so that the following quarters would be relatively easier," managing director Chandra Shekhar Ghosh told ET.

The extent to which the Covid-19 pandemic will impact the bank's provision on assets and future results will depend on future developments, which are highly uncertain, the bank said in a regulatory filing to stock exchanges.

“The repayment collection would have been better but for the Assam flood and extended lockdown in some states including Assam, Tamil Nadu and West Bengal,” Ghosh said.

The Kolkata-based private sector lender with 61 percent weightage on microfinance has witnessed 68 percent repayment efficiency from micro borrowers till the end of June while the collection from home loan borrowers revived to 85 percent.

Its net interest margin for the quarter was 8.15 percent compared with 8.63 percent in the year ago period. The bank is aiming to keep its net interest margin around the current level, chief financial officer Sunil Samdani said.

Bandhan said it has added 2.13 lakh customers during the quarter to take the base to over two crores even as the economic uncertainty looms large with demand and supply chains taking time to normalise after a three-month long lockdown.

Its gross non-performing assets ratio improved to 1.43 percent against 1.70 percent last year while the net ratio was at 0.48 percent against 0.58 percent.

Bandhan's capital adequacy ratio was at 26.45 percent, more than comfortable than the regulatory minimum.