Bandhan Bank Ltd.’s quarterly profit fell on higher provisions in anticipation of a rise in borrower stress.
Net profit fell 32% year-on-year to Rs 373 crore in the quarter ended June, it said in an exchange filing. Analysts polled by Bloomberg had estimated the metric at Rs 275 crore.
The Kolkata-based lender’s net interest income, or core income, rose 16.7% to Rs 1,811 crore compared with the Rs 1,977-crore forecast.
The bank’s gross non-performing asset ratio rose to 8.2% in the quarter ended June, from 6.8% as on March. Net NPA fell marginally to 3.3% from 3.5% in the preceding quarter.
Provisions rose sharply by 62% year-on-year to Rs 1,375 crore, on account of accelerated provisions—or set aside more money than required by the regulator if borrower stress is expected to rise—worth Rs 751 crore, resulting in a provision coverage ratio of 62% in the quarter ended June, compared with 50% in the preceding quarter.
“Typically, second half of the financial year is always better for the bank in terms of growth and collections,” Chandra Shekhar Ghosh, managing director and chief executive at Bandhan Bank, said in a statement. “With easing of Covid-19 second wave and upcoming festive season, we’re confident of achieving better performance going forward.”
Total advances rose 8.1% year-on-year to Rs 80,357 crore, which included microfinance loans worth Rs 78,560 crore. The microfinance loans included Rs 58,350-crore worth business loans and individual loans amounting to Rs 20,210 crore.
Deposits rose 27.6% from a year ago to Rs 77,335.5 crore. Current account savings account deposits constituted about 43% of total deposits, against 43.4% a year ago. Retail deposits constituted 82.6% of total deposits.