Bandhan Bank‘s net profit for the quarter ended March grew 68% on year to Rs 534 crore, as provisions fell and asset quality improved. Analysts had pegged the net profit for the bank at Rs 412 crore, according to estimates by Bloomberg.

The net interest income rose 1.4% on year to Rs 2,796 crore for the reporting quarter. The net interest margin improved to 6.20% for Jan-Mar as against 5.90% a quarter ago. The bank’s management said the growth in margins was on due to an improvement in the cost of funds.

In the post earnings media call, they said that they aim to exit FY27 NIM at 6% of total advances and 6.4% of total earnings assets. Other income for the quarter too inched up by 10.2% on year.

Growth in gross advances

The gross advances of the bank grew 12.6% on year and deposits grew 10% on year. Within advances, the retail book inched up 46% on year to Rs 16,030 crore as on March 31. Wholesale banking to grew 33.3% on year to Rs 48,450 crore.

Retail deposits, which is CASA and retail term deposits, formed 73.7% of the total deposits from 72.4% a quarter back. CASA ratio stood at 29.3% as on March 31.  

Partha Pratim Sengupta, managing director and CEO of Bandhan Bank said that they aim to grow in line with industry. On the impact of the geopolitical tensions, Sengupta said that they do not see any impact on the book right now, however they remain cautious.

Fall in provisions for reporting quarter

Provisions for the reporting quarter fell by 46.3% on year to Rs 677 crore. On the final expected credit line guidelines released on Monday, the bank’s management said that their estimate might be in-line or even lower. Considering the draft guidelines, the bank has estimated that they would have to make an additional provision of Rs 1,250 crore, as per their December figures.

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“If it is spread over 5 years then it is 250 crores and if it is spread over 4 years then 300 crores per year. We intend to do this only from April 1, 2027.” The provision coverage ratio stood at 71.1% as on March 31.

The asset quality of the bank improved with gross non-performing asset ratio at 3.27% as on March 31, as against 3.33% a quarter ago and net NPA ratio at 0.97% from 0.99% a quarter ago. Credit cost for Jan-Mar fell to 2% from 3.3% a quarter ago. Fresh slippages for the reporting quarter too reduced to Rs 1,030 crore from Rs 1,310 crore a quarter ago. The capital adequacy ratio stood at 18.04% as on March 31.

Separately, the bank has approved the appointment of Surajit Roy Choudhury as the Head – Emerging Entrepreneurs Business, with effect from June 30 and they have also approved the appointment of Sujoy Roy as the National Collection Head for all lending products of the bank, with effect from April 28.

On Tuesday, the shares of Bandhan Bank closed 1.8% lower at Rs 178.65 on NSE. The results were announced post market hours.