Bandhan Bank, the Kolkata-based private sector bank, began FY19-20 with major growth across parameters as profit shot up 45.6% YoY in the June quarter to ₹701.1 crore despite higher provisions YoY. Profit in the corresponding period last fiscal had stood at ₹481.7 crore.
Net interest income during the quarter increased 36% to ₹1,410.4 crore, compared to the same period last fiscal with loan growth at 39.4% YoY. Meanwhile, the deposit portfolio grew 42.33% YoY.
The bank posted a growth of over 45% in net profit for FY19-20 Q1 against the same period last year by riding on higher net interest income and growth in its micro-credit portfolio.
About 86% of the bank’s total advances are micro-loans, which stood at ₹45,420 crore during the quarter under review, registering a growth of over 39%.
Net interest income grew by 36% to ₹1,411 crore (₹1,037 crore). Other income grew by 48% to ₹312 crore.
During the quarter under review, the bank received ₹370 crore from sale of Priority Sector Lending Certificates, compared with ₹256 crore last year. Of this ₹370 crore, nearly ₹92 crore had been recognised in the profit-and-loss account during the quarter and the remaining amount of ₹277 crore would be recognised in the profit-and-loss account over the remaining three quarters, the bank said in the Notes to Accounts submitted to stock exchanges on Friday.
Net interest margin (NIM) for the June quarter stood at 10.45% against 10.27% in the corresponding quarter of the previous year.
The percentage of gross non-performing assets (GNPA) to total advances, however, was higher at 2.02% (1.26%).
Single exposure to IL&FS
According to Chandra Shekhar Ghosh, MD and CEO, the higher GNPA was due to single exposure to IL&FS, which defaulted in its debt obligations, and, if that account were excluded, the GNPA would be around 1.11%. The bank had made a provision of about ₹385 crore against IL&FS in September last year, he said. The net NPA stood at 0.56% (0.64%).
‘The year 2019-’20 has started on a promising note, with asset growth at 39.36%, along with stable asset quality. During the year, we expect the Gruh merger to get consummated, which will bring diversification and add to growth’
- Chandra Shekhar Ghosh, MD & CEO