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On the back of higher provisioning for non-performing assets, Bandhan Bank registered a nearly 80 per cent drop in net profit at ₹103 crore for the quarter ended March 31, 2021, compared with ₹517 crore in the same period last year.
Provisions increased by nearly 93 per cent at ₹1,594 crore during the quarter under review compared with ₹827 crore in the same period last year.
The bank’s gross non-performing asset (NPA) as a percentage of advances increased to 6.81 per cent against 1.48 per cent in the same period last year. Sequentially, gross NPAs increased from 1.11 per cent during the quarter ended December 30, 2020. Net NPA also increased to 3.51 per cent against 0.58 per cent in the same period last year. On a sequential basis, net NPA increased from 0.26 per cent registered in December 2020 quarter.
Accounts restructuring
According to Chandrashekhar Ghosh, MD & CEO, Bandhan Bank has restructured accounts under its housing loan portfolio amounting to ₹617 crore during the quarter under the Reserve Bank of India’s one-time restructuring scheme. “We have doubled our provisions during the quarter. We have restructured housing loan accounts to the tune of ₹617 crore but we have not restructured any loans from the microfinance portfolio,” Ghosh told newspersons at a virtual press meet announcing the bank’s results on Saturday.
The board of directors of the bank has proposed a dividend of ₹1 per share for the year ended March 31, 2021.
Home loan portfolio rejig
Sunil Samdani, CFO, Bandhan Bank, said most of its home loan borrowers were self-employed customers and they requested for restructuring of home loan so as to be able to meet their cash flow requirements.
“These are our long-standing and loyal customers and a majority of the accounts restructured are standard customers and we do not anticipate any accelerated level of stress from these accounts,” he said.
Net interest income grew by around five per cent at ₹1,766 crore (₹1,680 crore).
The bank’s net interest margin (annualised) for the quarter ended March 31, 2021 stood at 6.8 per cent against 8.1 per cent same period last year.
Collection efficiency
The NIM would have been at 8.8 per cent excluding one-time reversal on account of NPA recognition and interest on interest, he said.
The bank’s collection efficiency (including write-offs and NPAs) stood at 95 per cent as on March 2021, against 92 per cent in December 2020 and 89 per cent in September 2020.
According to Ghosh, the second wave of Covid-19 has impacted collection efficiency, which has dropped by around 3-5 percentage points depending on the region. However, it is confident that the situation will improve over the next one or two months.
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