Bandhan Bank Q1 profit drops 32% to Rs 550 crore on higher COVID provisions

Private sector lender Bandhan Bank has reported 31.59 per cent decline in net profit at Rs 550 crore during the first quarter ended June 30, 2020 (Q1 FY21), against Rs 804 crore in the corresponding quarter of the previous year, due to higher provisioning for possible credit losses due to COVID-19. On the quarter-on-quarter basis, the profit rose 6.38 per cent against Rs 517 crore in March quarter of FY20.

"During the quarter, the bank has taken accelerated additional provision on standard advances amounting to Rs 750 crore. With this provision and additional standard assets provision that bank is carrying in micro banking portfolio, total additional provision in books stands at Rs 1,769 crore," Bandhan Bank said in a regulatory filing.

The Kolkata-headquartered bank's net interest income for the quarter grew by 14.98 per cent to Rs 1,811 crore as against Rs 1,575 crore in the corresponding quarter of the previous year.

Non-interest income soared by 16.92 per cent to Rs 387 crore for the quarter ended June 30, 2020 against Rs 331 crore in the year ago period. Net interest margin (annualised) for the quarter ending June 30, 2020 stood at 8.15 per cent against 8.13 per cent in March 31, 2020.

Operating profit for the quarter increased by 16.81 per cent to Rs 1,584 crore against Rs 1,356 crore in the corresponding quarter of the previous year.

Also Read: Federal Bank Q1 profit rises 4% to Rs 401 crore; provisions doubles to Rs 395 crore

Commenting on Q1 earnings, Chandra Shekhar Ghosh, Managing Director and CEO of Bandhan Bank said: "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 growing by over 47 per cent.

On the asset front, Bandhan Bank's gross non-performing assets (NPAs), as a percentage of total advances, fell to 1.43 per cent in Q1 FY21 compared with 1.70 per cent in Q1 FY20. The net NPA ratio declined to 0.48 per cent against 0.59 per cent in same quarter last year.

The bank's total advances (on book + off book + TLTRO) climbed 17.68 per cent YoY to Rs 74,331 crore, while total deposits grew by 35.30 per cent YoY to Rs 60,610 crore as on June 30, 2020. Its Capital Adequacy Ratio (CAR) stood at 26.45 per cent with Tier I at 23.22 per cent.

Meanwhile, shares of Bandhan Bank ended trade at Rs 349.65, down 0.78 per cent, against previous closing price of Rs 352.40 on the BSE on Wednesday.

Also Read: Google-RIL deal at Rs 55,000 crore lower valuation for Jio Platforms