Private sector lender Bandhan Bank on Wednesday reported over three-fold year-on-year jump in its net profit to ₹721.16 crore for the second quarter this fiscal, on the back of a 50 per cent y-o-y fall in its provisions. 

In the second quarter last fiscal, the Kolkata-based lender’s net profit stood at ₹209.27 crore. Sequentially, the net profit for Q2FY24 remained flat compared with ₹721.05 crore for Q1FY24

Financial performance

During the period under review the bank’s provisions fell to ₹636.15 crore compared with ₹1,279.67 crore for the corresponding period last fiscal, according to a stock exchange filing. The bank’s net interest income (NII) increased 11.4 per cent y-o-y to ₹2,443 crore from ₹2,193 crore from the year-ago period. Net interest margin (NIM) soared 20 basis points y-o-y at 7.2 per cent.

“With faster portfolio expansion in the third and fourth quarters, NIM usually moves up. Just for the month of September, NIM was at 7.6 per cent, reflecting festive demand and showing that our guidance of NIM between 7-7.5 per cent is likely to be achieved,” said managing director and CEO Chandra Shekhar Ghosh.

During the quarter under review the bank’s non-performing assets (NPAs), in absolute term, rose 14.88 per cent y-o-y at ₹7,873.82 crore as against ₹6,853.85 crore for the corresponding period of financial year 2022-23, according to a stock exchange filing. Gross NPA ratio during Q2FY24 increased 10 bps at 7.3 per cent from 7.2 per cent in Q2FY23.

Collection efficiency for the bank improved to 98 per cent in September, 2023 from 97 per cent a year ago. 

Loan portfolio during the period under review grew 12.3 per cent y-o-y at ₹1.08 lakh crore. “As the festive season sets in, there has already been a notable uptick in credit demand,” Ghosh said.

The lender is on track to increase the share of secured credit of its loan portfolio to 50 per cent. “In line with our medium term strategic objective, the share of secured assets as part of our total loan book continues to increase and reached 44 per cent in Q2FY24. We expect to have nearly 50 per cent of our portfolio secured by FY26,” Ghosh added.