Riding on the back of higher provisioning, Bandhan Bank witnessed a 32 per cent decline in net profit at ₹373 crore for the quarter ended June 30, 2021, compared with ₹550 crore in the same period last year.

Provisioning was up by nearly 62 per cent at ₹1,375 crore during the quarter under review against ₹849 crore. The bank has made accelerated provision on NPA accounts of ₹751 crore, resulting in PCR (provision coverage ratio) of 62 per cent against 50 per cent in Q4 FY21.

In addition to this, it is also carrying additional standard assets provision amounting to ₹323 crore and provision on restructured assets amounting to ₹529 crore.

Gross slippages during the quarter was close to ₹1,661 crore; it was 3,500 crore in Q4 of FY21.

Gross non-performing asset (NPA) shot up significantly on a year-on-year basis to ₹6,440 crore (₹1,007 crore). Gross NPA as a percentage of total advances increased to 8.18 per cent (1.43 per cent); net NPAs increased to 3.29 per cent (0.48 per cent).

The bank restructured loans amounting to ₹4,661 crore during the first quarter. The total restructured loan book as on date is ₹5,276 crore.

Collection efficiency

The bank’s overall collection efficiency was at 85 per cent including NPA and 89 per cent excluding NPA during the first quarter of this fiscal.

Collection efficiency in West Bengal and Assam stood at 85 per cent and 67 per cent, respectively, and for the rest of India it stood at 90 per cent.

In West Bengal and Assam, Covid restrictions were imposed starting mid-May and continued till mid-July, which impacted the collection efficiency against the rest of India where withdrawal of restrictions happened post-May, the bank said.

According to Chandra Shekhar Ghosh, Managing Director and CEO of Bandhan Bank, there will be an improvement in collection efficiency, moving forward.

Net interest income was up by 17 per cent at ₹2,114 crore (₹1,811 crore). Non-interest income grew by 38 per cent to ₹533 crore (₹387 crore).

Net interest margin (NIM) increased to 8.5 per cent during the quarter under review as against 8.2 per cent last year.

The bank’s total business (deposits and advances) grew 17 per cent year-on-year to reach ₹1.57-lakh crore as on June 30. The deposit book grew 28 per cent and stands at ₹77,336 crore. The current account and savings account (CASA) book grew by 48 per cent year-on-year, and the CASA ratio now stands at 43 per cent of the overall deposit book. Advances grew by eight per cent at ₹80,128 crore.

“We expect exponential growth (in business) once the situation normalises. The country’s economic growth would be contributed by rural India and we will focus on rural and semi urban regions moving forward,” he said.

Capital adequacy ratio, an indication of the stability of the bank, is at 24.8 per cent, much higher than the regulatory requirement.

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