Bandhan Bank on Friday reported a 93% year-on-year plunge in its profits after tax to Rs 55 crore in the March quarter, dragged by higher provisioning and bad loan write-offs. The private lender’s profit stood at Rs 810 crore a year ago. The bottom line was significantly below the Rs 890 crore estimated by analysts at Bloomberg.
Chandrashekhar Ghosh, MD & CEO, Bandhan Bank, explained that the technical write-offs relate to micro-credit pertaining to a three-year period ended 2021-22 (April-March). Of the total technical write-offs of Rs 3,852 crore, the credit guarantee fund for micro units (CGFMU) portfolio stood at Rs 3,053 crore.
The bank said that it has technically written off loans as a prudent measure and in accordance with its policy. At the same time, the bank’s provisions rose 141% to Rs 1,774 crore in Q4 from Rs 735 crore a year ago, and this weighed on the bank’s bottom line.
Overall, the bank’s gross advances rose 14.3% to Rs 1.25 trillion whereas deposits jumped 25% to Rs 1.35 trillion. The loan book was aided by commercial banking, retail loans and housing book. The bank’s current account savings account (CASA) deposits stood at Rs 50,151 crore. The CASA ratio stood at 37.1%.
Net interest income, the difference between interest earned and interest expended, rose 16% y-o-y to Rs 2,866 crore in the March quarter. The net interest margin improved to 7.6% from 7.2% a year ago.
The bank’s gross non-performing asset ratio improved to 3.8% as on March 31 from 7% a year ago. The net non-performing asset ratio fell to 1.1% as on March 31 from 2.2% a year ago.
The bank declared a dividend of Rs 1.50 per share. The private lender’s shares closed 1% up at Rs 181.25 apiece.