Bandhan Bank’s Q3 net profit falls 66% to Rs 291 crore

Provisions to cowl sticky mortgage belongings and a fall in internet curiosity revenue pulled Bandhan Financial institution’s profitability down with each internet and working revenue displaying a dip within the December quarter whereas the financial institution administration is anticipating higher numbers within the subsequent quarter with enchancment in enterprise setting.

Its internet revenue fell 66% at Rs 291 crore within the third quarter ending December final 12 months as in contrast with Rs 859 crore within the 12 months in the past interval. Working revenue declined by 1.4% at Rs 1992 crore.

Its internet curiosity margin for the quarter was at 6.5% as in opposition to 7.8% within the corresponding interval final 12 months. Internet curiosity revenue fell 2% at Rs 2081 crore. Provisions had been 91% increased at Rs 1542 crore in opposition to Rs 806 crore within the 12 months in the past interval.

Bandhan managing director Chandra Shekhar Ghosh expects NIM to enhance hereon when the impression of lending charge hikes can be realised and the extent of rate of interest reversal will come down with cleaning of the stability sheet. The financial institution has raised lending charges by as much as 250 foundation factors throughout enterprise verticals over the past three months.

Chief monetary officer Sunil Samdani mentioned that about 70% of the financial institution loans are mounted charge loans and thus rapid impression of charge hikes is barely restricted to the 30% of loans that are floating charge foundation. The brand new charges are relevant solely on the time of renewals or on contemporary loans and thereby it will take about one other six months for the impression to be seen on profitability margin, he defined.

The stress on asset high quality on Bandhan’s e-book was largely as a result of restructured mortgage pool of Rs 8000 crore, which noticed merely one-third restoration. On the finish of December, the burdened pool microfinance loans stood at Rs 7600 crore, of which Rs 5000 crore is supplied for and one other Rs 1700 crore is roofed below credit score assure scheme.

In the course of the quarter, the financial institution noticed contemporary slippage of Rs 3265 crore, a fall from Rs 3954 crore seen within the previous quarter. It wrote off loans to the tune of Rs 2533 crore within the December quarter.Its gross non-performing belongings ratio improved to 7.2% on the finish of the reporting interval in opposition to 10.8% a 12 months again. Internet NPA was at 1.9% in opposition to 3% earlier.

The financial institution’s advances grew 11% year-on-year to Rs 97787 crore. Its deposit progress outpaced credit score progress at 21% to Rs 1.02 lakh crore whereas the present account and financial savings account (CASA) ratio fell to 36.4% of the general deposit from 45.6% earlier, additionally placing stress on the NIM for the quarter.