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Bandhan Bank Q1 profit jumps 138% to Rs 886 crore; asset quality weakens

Provisions for the June quarter were at Rs 642.4 crore, down 56 percent compared to Rs 1,460.9 crore logged in the corresponding period of the previous fiscal.

July 22, 2022 / 03:58 PM IST
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Kolkata-based private sector lender Bandhan Bank on July 22 clocked a massive 137.6 percent year-on-year (YoY) increase in net profit for the quarter ended June 2022, aided by lower provisions and higher net interest income. However, asset quality weakened.

The profit came in at Rs 886.5 crore, increasing sharply from Rs 373.1 crore registered in the corresponding period of the previous fiscal year.

Net interest income, the difference between interest earned and interest expended, grew by 18.9 percent YoY to Rs 2,514.4 crore for June 2022 quarter, driven by 20.3 percent growth each in loan book and deposits for the quarter.

"Total advances grew by 20.3 percent year-on-year to Rs 96,649.7 crore as of June 2022, and total deposits increased by 20.3 percent to Rs 93,057.0 crore in the same period," Bandhan Bank said.

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Commenting on the performance, Chandra Shekhar Ghosh, Managing Director, and CEO said with asset quality and credit cost stabilising, their focus in FY23 would be to grow the balance sheet and focus on product and geographic diversification as per the bank’s strategy.

Net interest margin at 8 percent in Q1FY23 contracted by 50 bps compared to the same period last year, and 70 bps compared to the previous quarter.

The lender said its housing finance division had achieved the best ever growth of 27 percent YoY in Q1. In comparison, the retail division grew by 62 percent and the commercial banking segment registered an 81 percent growth YoY.

Provisions for the June quarter were at Rs 642.4 crore, which fell by 56 percent compared to Rs 1,460.9 crore in the corresponding period of the previous fiscal.

Also read - HDFC AMC Q1 profit falls 9% to Rs 314.2 crore on lower other income

However, the asset quality performance of the bank weakened with gross non-performing assets (NPA) as a percentage of gross advances rising 79 bps sequentially to 7.25 percent and net NPAs increasing by 26 bps QoQ to 1.92 percent, but declined 93 bps and 137 bps YoY, respectively.

Bandhan Bank said other income (non-interest income) for the quarter came in at Rs 329.7 crore, down 46.6 percent YoY and pre-provision operating profit declined 7 percent YoY to Rs 1,820.6 crore.

Also read - UltraTech Cement Q1 Results | Profit declines 7% to Rs 1,584 crore; revenue grows 28%

The stock reacted positively to earnings, rising 1 percent to close at Rs 286.25 on the BSE.
Sunil Shankar Matkar
first published: Jul 22, 2022 03:57 pm
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