Bandhan Bank rises 2% on mixed Q4 results; management eyes asset quality recovery

So far this year, the stock of this private sector lender declined more than 24 percent, underperforming 3 percent rise in the benchmark Nifty 50 index

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Shares of Bandhan Bank rose 2 percent to Rs 185 per share on May 18 special trading session after the company reported mixed January-March quarter (Q4FY24) performance.

So far this year, the stock of this private sector lender declined more than 24 percent, underperforming the 3 percent rise in the benchmark Nifty 50 index. Earlier, Bandhan Bank shares hit 52-week high of Rs 272 per share on June 1, 2023.

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The lender's net profit declined sharply by 93 percent year-on-year (YoY) to Rs 54.63 crore in Q4FY24 due to increased provisions and higher write-offs. Its provisions and contingencies jumped to Rs 1,774 crore in Q4FY24 from Rs 735 crore in the year-ago period.

The bank wrote off bad loans worth Rs 3,850 crore in the March-ended quarter, compared to none in the past four quarters. These loans were disbursed to small borrowers during the Covid-19 pandemic and were covered by a government guarantee. They termed these loans as 'prudent measure.'

ALSO READ: Bandhan Bank Q4 net profit slides to Rs 55 cr on high loan write-offs, asset quality healthy

The lender's net interest income rose 16 percent YoY to Rs 2,866 crore, while net interest margin stood at 7.6 percent in the March-ended quarter.

On the asset-quality front, Bandhan Bank's gross non-performing asset ratio improved to 3.8 percent in Q4FY24 from 7.02 percent a quarter ago due to write-offs.

Chandra Shekhar Ghosh, Managing director and chief executive officer (MD and CEO), in the post results analyst call, said that the bank expects to see positive traction in asset quality with high focus on recovery.

Meanwhile, the bank's deposits grew 25 percent and stood at Rs 1.35 lakh crore and advances grew 14.5 percent in FY24 and stood at Rs 1.25 lakh crore as of end-March 2024.

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