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Bandhan Bank has reported a 48 per cent jump in net profit at ₹482 crore for the quarter ended June 30, 2018, compared to ₹327 crore in the same period last year.
The rise in profit was supported by a 52 per cent growth in its loan book at ₹32,590 crore and a 40 per cent growth in net interest income at ₹1,037 crore for the quarter under review.
Focus areas
According to CS Ghosh, MD and CEO, the bank will focus on the retail and MSME sectors to grow its loan book, going forward. The share of non-micro loans, including retail, grew 15 per cent to its total advances, compared to 10 per cent during the year-ago period.
“There is huge demand for loans, particularly from the MSME sector, and we wish to tap that,” Ghosh told newspersons after announcing the bank’s performance during the quarter here on Wednesday.
The bank’s total exposure to the MSME sector was around ₹2,500 crore, and it hopes to grow that by 24-25 per cent.
On sequential basis, profit during the April-June quarter grew by around 24 per cent, compared to ₹388 crore for the quarter ended March 31, 2018.
The net interest margin for the quarter under review was however, down at 10.27 per cent (10.75 per cent).
On the deposits front, the bank has been able to shed bulk deposits to the tune of ₹3,500 crore during the quarter under review. The share of retail to bulk deposits is ‘pretty healthy’ and currently stands at 80:20, said Ghosh. The share of current account and savings account (CASA) to total deposits increased to 35.46 per cent (26.33 per cent).
Going forward, the bank would focus on maintaining the ‘growth and quality of assets’ this fiscal, said Ghosh.
For the period under review, the bank’s gross non-performing assets more than doubled to ₹388 crore (₹175 crore), while its net NPAs increased to ₹194 crore (₹105 crore). Gross and net NPAs, as a percentage to its total advances, also went up to 1.26 per cent (0.93 per cent) and 0.64 per cent (0.56 per cent), respectively.
“The NPAs have mainly come from our micro-credit loans but that has now been arrested. So, we expect the asset quality to improve, moving forward,” he said.
Bandhan Bank is looking for some relaxation from the Reserve Bank of India to meet the shareholding norms for universal bank, said Ghosh.
RBI’s licensing norms require any bank offering ‘universal’ services to bring down the promoter holding to 40 per cent. However, the Securities and Exchange Board of India’s rules mandate a one-year lock-in period for promoter holding after an IPO.
“We are in talks with the RBI and will do whatever the regulator asks us to do,” he said.
It is to be noted that after the IPO, the promoter holding in Bandhan Bank came down to around 82 per cent from nearly 89 per cent earlier.
The bank’s scrip closed at ₹600.15, up 6.79 per cent on Wednesday.
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