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Bandhan Bank Q1 Net Profit Falls 32% To Rs 550 Crore On Higher Provisioning


Private sector lender Bandhan Bank on Wednesday reported nearly 32 per cent decline in net profit to Rs 549.82 crore for April-June quarter of the current fiscal, mainly due to additional provisioning in the wake of COVID-19.

The Kolkata-headquartered lender had posted a net profit of Rs 803.62 crore in the corresponding quarter of the previous fiscal.

Sequentially, the profit in June quarter FY21 was higher, compared to Rs 517.28 crore in March 2020 quarter.

The bank’s provision for bad loans and contingencies jumped multi-fold to Rs 849.06 crore for April-June quarter as against Rs 125.36 crore parked aside for the same quarter in FY20, it said in a regulatory filing.

Total income of the bank increased to Rs 3,404.84 crore over Rs 2,962.33 crore in the year-ago period on the back of healthy interest income. Interest income of the lender jumped to Rs 3,018.09 crore from Rs 2,631.30 crore.

On the asset quality front, the lender witnessed improvement as the gross non-performing assets (NPAs) fell to 1.43 per cent of the gross advances by end of June 2020, from 1.70 per cent in the same month of 2019. In absolute value, the gross NPAs or bad loans stood at Rs 1,006.67 crore as against Rs 1,019.70 crore.

Likewise, the net NPAs came down to 0.48 per cent (Rs 335.77 crore) from 0.59 per cent (Rs 347.50 crore).

The merger of erstwhile Gruh Finance Limited (Gruh) with Bandhan Bank Ltd had been approved by the Reserve Bank of India, Competition Commission of India, stock exchanges, respective shareholders and creditors of each entities as applicable and the National Company Law Tribunals (NCLT) Bench at Kolkata and Ahmedabad, with appointed date as January 1, 2019 and effective date as October 17, 2019, it said in the filing.

“In view of the amalgamation, the figures for the quarter ended June 30, 2019 have been arrived on the basis of aggregation of the separate results of the bank and Gruh for the said period, published earlier, i.e. prior to the effective date of amalgamation,” it added.

Bandhan Bank said its deposit increased by 35.30 per cent year-on-year to Rs 60,610 crore.

Accelerated additional provision on standard advances amounting to Rs 750 crore taken for COVID-19 to further strengthen the balance sheet, it said.

“We have made additional provisioning besides normal provisioning. This can be called COVID provisioning. Even in the last quarter of the previous fiscal, we had made similar provisioning of around Rs 1,000 crore,” Chandra Shekhar Ghosh, Managing Director and CEO of Bandhan Bank told PTI.

Mr Ghosh said although it is not certain when the scourge of the pandemic will be over, the bank will not have to go for any additional provisioning during the second quarter, even if the coronavirus situation persists.

The net profit of the September quarter will not be affected due to additional provisioning, he said.

Operating profit during the quarter grew by 16.8 per cent to Rs 1,584 crore as against Rs 1,356 crore a year ago. Mr Ghosh added that the additional provisioning was made from the opeating profit.

“During the quarter, we have started collections post unlocking announced by the government. Overall bank collections improved to 76 per cent by end of June 2020 compared to 29 per cent in April 2020.

“We continued to showcase the strengths of our retail deposit franchise with strong growth of 35 per cent during this difficult time, especially CASA (current account savings account) growing by over 47 per cent,” Mr Ghosh said.

The collection efficiency ratio is expected to normalise between 95 per cent and 98 per cent by September, he said, adding, signs of demand generation is visible and disbursements have started.

Also, the lender added 2.13 lakh customers during the quarter with total customer base at 2.03 crore as on June 30, 2020. As on June 30, 2020, the total number of branches, banking units and ATM network stood at 1,018, 3,541 and 485 respectively, the bank said.

Stock of Bandhan Bank closed at Rs 349.65 apiece on BSE, down 0.78 per cent from previous close.



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