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Bandhan Bank posts Q2 loss at Rs 3,008.6 crore as provisions spike, net interest income up 0.6%

During the quarter, the bank has made accelerated provision on NPA accounts of Rs 1,500 crore resulting in provision coverage ratio of 74 percent as against 62 percent in Q1FY22.

October 29, 2021 / 05:18 PM IST
 
 
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Private sector lender Bandhan Bank on October 29 posted a standalone loss of Rs 3,008.6 crore for the quarter ended September 2021, dented by a significant increase in provisions for bad loans and a fall in operating profit.

The bank had reported a profit of Rs 920 crore in the September 2020 quarter.

"During the quarter we have seen substantial recovery in collections as the second wave of COVID subsided. We have recognized the stress pool and proactively taken additional requisite provisions such as to meet any contingency requirements and to look forward to do business on a clean slate. This has resulted in loss for the quarter," said Chandra Shekhar Ghosh, Managing Director and CEO.

However, "it will help us to concentrate on fresh business growth and to concentrate towards achieving long term goals with renewed energy," he added.

Net interest income, the difference between interest earned and interest expended, grew by 0.6 percent YoY to Rs 1,935.4 crore in Q2FY22, with 6.6 percent growth in loan book and contraction in net interest margin.

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Advances during the quarter increased 6.6 percent year-on-year to Rs 81,661.2 crore and deposits grew by 23.9 percent to Rs 81,898.3 crore in Q2FY22, said Bandhan Bank in its BSE filing.

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Net interest margin contracted to 7.6 percent in September 2021 quarter, compared to 8 percent in the year-ago quarter and 8.5 percent in June 2021 quarter, the bank added.

On the asset quality front, gross non-performing assets (NPA) as a percentage of gross advances at 10.8 percent as of September 2021 increased sharply against 8.2 percent in previous quarter. But net NPAs fell to 3 percent against 3.3 percent on a sequential basis.

During Q2FY21-22, the bank said it restructured emerging entrepreneurs business (EEB) portfolio worth Rs 3,490 crore and non-EEB portfolio worth Rs 268 crore totalling Rs 3,758 crore.

Bandhan Bank, which has banking outlets at 5,618 as of September 2021, reported provisions and contingencies at Rs 5,577.91 crore in Q2FY22, increasing sharply compared to Rs 1,442.02 crore in Q1FY22 and Rs 379.59 crore in Q2FY21.

During the quarter, "the bank has made accelerated provision on NPA accounts of Rs 1,500 crore resulting in provision coverage ratio of 74 percent as against 62 percent in Q1FY22," said Bandhan Bank.

In addition to this, the bank has also provided additional standard assets provision amounting to Rs 2,100 crore and provision on restructured assets amounting to Rs 1,030 crore amounting to total of Rs 4,630 crore, it added.

Non-interest income during the quarter grew by 34 percent to Rs 491.6 crore, but operating profit decreased by 3.9 percent to Rs 1,549.2 crore compared to the corresponding quarter of the previous year.

The stock fell 2.36 percent to close at Rs 291.50 on the BSE, ahead of corporate earnings.



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Moneycontrol News
first published: Oct 29, 2021 05:18 pm
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