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Bandhan Bank shares slip after loan book, deposits fall in Q1; global brokerage retains 'underperform' call

Total loans and advances shrunk by 8 percent in the June quarter to Rs 80,128 crore compared with Rs 87,043 crore in the March quarter. Total deposits contracted by a percent on a QoQ basis to Rs 77,336 crore from Rs 77,972 crore, the bank has said

July 16, 2021 / 09:54 AM IST
 
 
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Bandhan Bank share price shed over 2 percent in the morning session on July 16, a day after the private lender said its loan book and deposits declined in the June quarter.

In a business update to the stock exchanges, the Kolkata-based bank on July 15 said its loans and advances shrunk by 8 percent in the June quarter to Rs 80,128 crore from Rs 87,043 crore in the March quarter. Total deposits contracted by a percent QoQ to Rs 77,336 crore from Rs 77,972 crore, the bank said.

On a year-on-year (YoY) basis, however, loans and deposits grew by 8 percent and 28 percent, respectively.

Within deposits, CASA (current, savings account deposits) shrunk by 2 percent on a QoQ basis but showed a growth of 48 percent on a YoY basis.

Retail deposits, however, showed strong growth in the quarter, growing by 4 percent on a QoQ basis and 36 percent on a YoY basis. Bulk deposits (larger deposits), however, shrunk by 19 percent sequentially and by a percent on YoY basis.

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The stock was trading at Rs 312.90, down Rs 6.70, or 2.10 percent at 0935 hours. It has touched an intraday high of Rs 316.05 and an intraday low of Rs 307.25.

The ratio of retail to total deposits improved to 83 percent in the June quarter compared with 79 percent in the preceding quarter. A jump in the share of retail deposits is seen as a healthy sign for a bank. CASA ratio, however, declined to 42.9 percent from 43.4 percent sequentially.

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According to industry officials, Bandhan Bank’s collections suffered due to the COVID situation and also partly on account of the lower collections reported in Assam, where some provisions of a recent microfinance bill, along with a call for loan waiver by local politicians, has impacted credit discipline.

Global research firm CLSA has maintained its underperform call on the stock with the target at Rs 300 per share. The brokerage firm believes that the first-quarter update indicates collection efficiency of 72 percent in the microfinance business against 95 percent collections in March, a CNBC-TV18 report said.

"MFI collections drop has been high in second COVID wave. In West Bengal, overdues are high in spite of negligible political interference," it said.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.
Moneycontrol News
first published: Jul 16, 2021 09:54 am

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