MUMBAI : Bandhan Bank on Wednesday reported an over three-fold jump in year-on-year (y-o-y) net profit, as the bank set aside lower provisions against bad loans. However, the bank’s net profit remained flat on a sequential basis, indicating poor business performance.
The Kolkata-headquartered private sector lender posted a net profit of ₹721 crore in the quarter ended 30 September, compared to ₹209.3 crore for the corresponding period a year ago, and ₹721 crore in the previous quarter.
Asset quality deteriorated, with the gross non-performing assets (NPAs or bad loans) rising to ₹7,870 crore as of 30 September, from ₹6,960 crore during the previous quarter.
Gross NPA as a percentage of total advances rose to 7.32% at the end of the September quarter, from 6.8% during the previous quarter. This increase in NPA was on account of higher defaults in the microfinance portfolio in Manipur, which is currently in the throes of ethnic violence.
Similarly, net NPAs—bad loans after setting aside provisions—increased to 2.32% at the end of the September quarter, from 2.2% during the previous quarter.
Provision (other than tax) and contingencies declined to ₹636 crore, from ₹1,280 crore in the same quarter a year ago. However, on a sequential basis, provisions rose from ₹602.08 crore in the June quarter.
The bank’s core income from operations or net interest income rose 11.7% y-o-y to ₹2,440 crore as of 30 September, compared to ₹2,190 crore during the same period a year ago. Net interest income, however, fell marginally from ₹2,490 crore in the previous quarter.
Net interest margins remained stable at 7.2% in the second quarter.
“The bank’s performance for the quarter has presented a mixed set of results, with NII showing a 2% sequential decline and asset quality weakening. However, we see growth and asset quality to improve in the 2HFY24 led by strong underlying credit demand and improvement in the collection efficiency going forward,” said Asutosh Mishra, head of research, Ashika Stock broking.
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Updated: 18 Oct 2023, 10:10 PM IST