Bandhan Bank reports 10.4 per cent rise in net profit

Bandhan Bank on Thursday reported a 10.4 per cent rise in its net profit to `331.3 crore in the quarter ended December.

Published: 11th January 2019 05:20 AM  |   Last Updated: 11th January 2019 05:20 AM   |  A+A-

Bandhan Bank

For representational purposes (File | Reuters)

By Express News Service

BHUBANESWAR: Bandhan Bank on Thursday reported a 10.4 per cent rise in its net profit to Rs 331.3 crore in the quarter ended December. The private sector lender’s profitability has taken a hit primarily as provisions remain elevated due to exposure to IL&FS.

The bank’s provisions and contingencies more than tripled to Rs 377.64 crore in the quarter from Rs 122.54 crore a year ago and Rs 124.17 crore in the previous quarter. Provisions worth Rs 384.95 crore were made for exposure to the troubled infrastructure financier. 

“We used to always take unsecured exposures. This was an experiment in secured lending to a AAA-borrower which has gone bad,” managing director and chief executive Chandra Shekhar Ghosh said. The bank has recognised the IL&FS account as a non-performing one, pushing up its gross non-performing assets ratio to 2.4 per cent compared with 1.17 per cent a year ago, he said. The net NPA ratio was, however, stable at 0.8 per cent versus 0.7 per cent a quarter earlier.

Having learnt lessons from the IL&FS exposure, Ghosh said the bank’s future strategy would be “to focus on affordable housing, small business and individual borrower to grow its book.”

During the quarter, net interest income, the core income a bank earns by giving loans, was up 53.5 per cent to Rs 1,124 crore, while other income grew 48 per cent and stood at Rs 234 crore. Net Interest Margin stood at 70.3 per cent against 9.9 per cent in the corresponding quarter the previous year. Deposits were up by 20 per cent at Rs 34,639 crore.

Earlier this week, the board of Bandhan Bank approved the acquisition of GRUH Finance, subject to regulatory and shareholder approvals. The merger would help the Kolkata-based lender achieve product and geographic diversification while improving penetration in its core customer segment.

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