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Private sector lender Bandhan Bank has reported a healthy 47.4 percent growth in profit of July-September quarter compared to a year-ago, driven by strong NII and operating income, and stable asset quality.
Profit increased to Rs 488 crore during the quarter, from Rs 331 crore in corresponding period last fiscal, the bank said in its filing.
Net interest income, the difference between interest earned and interest expended, shot up 55.6 percent year-on-year to Rs 1,078 crore in Q2 with strong improvement in net interest margin and massive growth in advances.
NIM for the quarter stood at 10.3 percent, which improved by 100 basis points from 9.3 percent reported year-ago but flat on sequential basis.
Bandhan Bank said advances (on book + off book) increased by 50.9 percent year-on-year to Rs 33,373 crore in September quarter while deposits growth was 29.6 percent to Rs 32,959 crore with retail deposit to total deposit at 81.6 percent.
"Our microcredit advances stood at 87 percent of total advances. We are happy to continue the microcredit growth," Chandrasekhar Ghosh, CEO and MD said while addressing press conference.
CASA ratio for the quarter stood at 36.9 percent of total deposit, compared to 28.2 percent in the corresponding period last year. "CASA grew 69.8 percent YoY at Rs 12,176 crore compared to Rs 7,170 crore," the bank said.
Asset quality was largely stable in the quarter gone by. Gross non-performing assets as a percentage of gross advances inched up to 1.3 percent in Q2FY19 from 1.26 percent in previous quarter and net NPAs were higher at 0.7 percent against 0.6 percent quarter-on-quarter.
In absolute terms, gross NPAs surged 48 percent to Rs 413.35 crore as on September 30, from Rs 279.15 crore at the end of the same quarter last year.
Provisions and contingencies increased sharply by 55 percent sequentially and 43 percent year-on-year to Rs 124.17 crore in quarter gone by.
The bank has maintained its capital adequacy ratio at 32.6 percent for the quarter YoY, but improved from 26.3 percent in Q2FY18.
Bank's non-interest income during the quarter grew by 3.1 percent to Rs 230 crore and operating profit jumped 46.9 percent to Rs 874 crore compared to same period last fiscal.
Ghosh said the bank has some MFI level exposure to NBFCs but it is a limited amount.
Meanwhile, promoters' stake in the bank stood at 82.28 percent as of June 2018, which has to be reduced to 75 percent over a period of time so that public shareholding would be 25 percent as per minimum public shareholding norm by SEBI.
"We are committed to maintain compliance and a good strategic plan has been prepared to meet the deadline. There are three options available including to go for an offer for sale (OFS) and a merger," Ghosh said. "We have no owner in the management. We are continuously engaging with RBI and will submit a plan to RBI on reducing promoter shareholding," he added.
Recently, the RBI restricted the bank from opening new branches and put a freeze on the remuneration of the CEO.
At 14:08 hours IST, the stock price was quoting at Rs 507.40, up Rs 22.50, or 4.64 percent on the BSE.
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