Bandhan Bank has reported a nearly 19 per cent drop in net profit at ₹720 crore for the first quarter ended June 30, 2023, against ₹887 crore same period last year on the back of a drop in core income.

Net interest income dropped by nearly one per cent at ₹2,491 crore (₹2,514 crore) during the quarter under review .  

Muted credit demand

According to Chandra Shekhar Ghosh, MD & CEO, Bandhan Bank, the cost of deposits has increased while interest income has been impacted due to lower disbursements as credit demand is generally muted during the first quarter. However, the bank is expecting 20 per cent growth in both deposits and advances during the current fiscal.

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Other income increased by nearly 17 per cent at ₹385 crore (₹330 crore) .

“In the first quarter, the disbursements under microcredit has been lower and overall interest income was less. Cost on deposits has increased. Moving forward, we expect advances growth to pick up and other income will also increase contributing to an overall growth,” Ghosh told newspersons at a press conference to announce the bank’s performance during the quarter.

The bank’s loan portfolio grew by nearly seven per cent on a year-on-year basis at ₹1.03 lakh crore. Total deposits grew by 17 per cent at ₹1.08 lakh crore. Sequentially, however, its credit growth had come down by nearly six per cent to ₹96,650 crore (₹1,09,122 crore) during the quarter ended June 30, 2023, the bank had said in its initial disclosure to stock exchanges.

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On the asset quality front, gross non-performing asset (NPA) as a percentage to total advances came down to 6.76 per cent (7.25 per cent). However, net NPA increased to 2.18 per cent (1.92 per cent) during the quarter under review. Total provisions during the quarter came down by nearly six per cent at ₹602 crore (₹642 crore).

The net interest margin was stable at 7.3 per cent. The bank had earlier given an NIM guidance of around 7-7.5 per cent in FY-24.

The bank is planning to roll out credit cards under the bank brand by the end of this fiscal, he said.

The bank’s scrip closed at ₹221.75, up by 2.71 per cent on the BSE on Friday.