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While many banks are reeling under high non-performing assets and net losses, Kolkata-based Bandhan Bank has reported a net profit of ₹275.25 crore in the first seven months of its operations.
Bandhan began banking operations in August 2015 following its transformation from a microfinance entity to a bank.
The bank’s net interest income stood at nearly ₹933 crore while it mobilised deposits to the tune of nearly ₹12,089 crore.
Total advances (gross) stood at nearly ₹15,494 crore. The gross non-performing asset ratio (as a per cent of total advances) stood at 0.15 per cent, while net NPA was 0.08 per cent.
“The results far exceeded our expectations. We are looking at 30 per cent growth in both deposits and advances this fiscal,” Chandra Shekhar Ghosh, Founder MD and CEO, Bandhan Bank, said.
Gross advances Of the gross advances of ₹15,494 crore, a bulk has been from micro-finance operations. Nearly, ₹3,000 crore of the loan book qualified as priority sector lending and has been sold to other banks under inter-bank participatory certificates (IBPC). An IBPC is a form of securitisation through which a bank buys other’s assets for a stipulated period, taking the credit risk of the folio. “Some of the banks to whom we sold a part of our loan portfolio include YES Bank, HDFC and IDBI,” he said. According to Ghosh, another ₹3,000 crore are “legacy loans”, that is loans which it had taken from banks during its days as a micro-finance institution. These loans are likely to be retired by the end of this fiscal.
The bank, Ghosh said, was also experimenting with small-format, low-cost branches in parts of West Bengal. These branches will target specific semi-urban areas and will restrict themselves to deposit-taking and withdrawal of money.
According to him, 21 such branches have been set up, mostly in the towns of West Bengal such as Memari in Burdwan and Ghola in North 24 Parganas.
The branches, which have a size of 500-600 sq feet, have three staff members that include a branch head and two assistants.
“We are experimenting with this format where only basic banking services will be carried out,” he said.
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