Bandhan Bank tops Rs 1 lakh crore market cap after Gruh Finance merger

By: |
October 30, 2019 4:56 PM

Private sector lender Bandhan Bank raced past the crucial Rs 1 lakh crore market capitalisation, days after completing the merger with Gruh Finance. It is now the 6th largest bank by market capitalisation.

Bandhan Bank share price closed 1.5% lower at Rs 614.35 on BSE.

Private sector lender Bandhan Bank raced past the crucial Rs 1 lakh crore market capitalisation, days after completing the merger with Gruh Finance. Bandhan Bank share price closed 1.5% lower at Rs 614.35 on BSE. Bandhan Bank is now the 6th biggest bank by market capitalisation. HDFC Bank (Rs 6.82 lakh crore), ICICI Bank (Rs 3.04 lakh crore), Kotak Mahindra Bank (Rs 3.01 lakh crore), State Bank of India (Rs 2.58 lakh crore), Axis Bank (Rs 2.10 lakh crore) are the top 5 banks by market cap. Affordable housing finance company Gruh Finance formally merged with private sector lender Bandhan Bank last week, in accordance with the amalgamation scheme. As at the end of June quarter, Gruh Finance’s total outstanding loan portfolio was Rs 17,641.27 crore, up by over 11% on-year. Around 95% of the loans were retail and 45% of loans were at locations where population is less than 50,000.

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 Notably, the Reserve Bank of India (RBI) has imposed a penalty of Rs 1 crore on Bandhan Bank for not bringing down the promoter shareholding to 40% as per its regulations. The merger with Gruh Finance has brought down promoter shareholding to 61% from 82.28 per cent earlier, but is still above the RBI guidelines. In the latest quarter, Bandhan Bank reported a net profit of Rs 972 crore up 99% from a year ago, on the back of a 66% year-on-year (y-o-y) rise in total income to Rs 3,050 crore as benefits of the bank’s acquisition of Gruh Finance came into play. The firm’s Net interest income (NII) soared 42% on-year to Rs 1,529 crore.

NII is the difference between interest earned and interest paid by the bank. However, Net interest margin (NIM) came in 225 basis points lower at 8.2% as compared to 10.45% at the end of the June quarter. Bandhan Bank’s provisions jumped 17% on-year to Rs 145 crore. Asset quality deteriorated marginally from the previous quarter, with the gross non-performing asset (NPA) ratio rising to 1.76% from 1.7%. The net NPA ratio fell three bps to 0.56%.

The bank achieved a major milestone in the quarter, adding 10 lakh customers, taking its total customer base to 1.83 crore. Chandra Shekhar Ghosh, managing director and chief executive officer, Bandhan Bank, said the bank will focus on the affordable-housing segment for growth.

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