Bandhan Bank releases Q1FY23 results: Here are top five takeaways

Bandhan Bank MD & CEO Chandra Shekhar Ghosh

Private sector lender Bandhan Bank on July 22 reported a 137.6 percent year-on-year (YoY) rise in its net profit for the quarter ended June at Rs 886.5 crore. The bottomline was aided by lower provisions and stable loan growth. Here are the top five takeaways from the bank’s Q1 report card:

NPAs rise sequentially

Bandhan Bank’s gross non-performing asset ratio (GNPA) rose to 7.25 percent as of June end, higher than 6.46 percent recorded by the end of March, but lower in comparison with 8.18 percent a year ago. The net NPA ratio rose to 1.92 percent as of June 30, lower than 1.66 percent as of March 31.

The bank made provisions to the tune of Rs 642.4 crore during April-June, lower than Rs 1,460.9 crore a year ago. Overall, the provision coverage ratio (PCR) stood at 74.9 percent as of June end.

Other income falls

In line with its peers, Bandhan Bank’s other income fell in the reporting quarter on account of a hit in treasury income.

During April-June, the bank’s other income stood at Rs 329.7 crore, lower than Rs 964.4 crore a quarter ago and Rs 616.9 crore last fiscal.

Loans, deposit growth remain stable

Bandhan Bank’s total advances rose 20.3 percent YoY to Rs 96,649.7 crore as of June 30. This is higher than the 10 percent-11 percent industry level non-food credit growth, seen recently.

Deposits, meanwhile, grew at a similar pace YoY to stand at Rs 93,057.0 crore as of June 30.

Owing to healthy growth in advances, Bandhan Bank’s net interest income - the difference between interest earned and expended - grew to Rs 2,514 crore during April-June, up 19 percent on-year.

Bandhan Bank’s net interest margin (NIM), a key indicator to judge lenders’ profitability, stood at 8 percent during April-June on an annualised basis, lower than 8.7 percent during January-March and 8.5 percent a year ago.

Collection efficiency stable

As per Bandhan Bank’s investor presentation, collection efficiency during Q1 improved to 98 percent from 97 percent a quarter ago.

For the month of June, Bandhan Bank’s overall collection efficiency stood at 97 percent, lower than 99 percent during March. This was mainly on account of collection efficiency in Assam falling to 93 percent in June from 98 percent in March.

Capital ratio slides

Bandhan Bank’s capital adequacy ratio stood at 20.4 percent as of June end, lower than 25.3 percent a year ago, indicating space for capital raising.