Bandhan Bank registers 19% drop in net profit in Q1FY24

Posted on by

Bandhan Bank It reported a drop of almost 19 per cent in net profit at ₹720 crore for the first quarter ended 30 June 2023, as against ₹887 crore in the same period last year on the back of lower underlying income.

Net interest income decreased by almost 1 per cent at ₹2,491 crore (Rs. 2,514 crore) during the quarter under review.

Muted demand for credit

According to Chandra Shekhar Ghosh, Managing Director and CEO of Bandhan Bank, the cost of deposits has increased while interest income has been affected due to lower payments as demand for credit is generally muted during the first quarter. However, the bank expects a 20 percent growth in both deposits and advances during the current fiscal year.

Also read: Bandhan Bank triples its branch network; It diversifies its presence across the country

Other income increased by almost 17 per cent at Rs. 385 crore (Rs. 330 crore).

“In the first quarter, microcredit payments were lower and total interest income was lower. Cost on deposits increased. Going forward, we expect forward growth to pick up and other revenues to also increase which contributes to the overall growth.

The bank’s loan portfolio grew by nearly seven per cent on an annual basis at ₹1.03 lakh crores. Total deposits grew by 17 per cent at Rs. 1.08 thousand crore. Sequentially, however, credit growth fell by almost six percent to Rs. 96,650 crore (Rs. 1,09,122 crores) during the quarter ended June 30, 2023, the bank said in its preliminary disclosure to stock exchanges.

Also read: Pandhan Financial Services Fund NFO: Should You Invest?

On the asset quality front, total non-performing assets as a percentage of total advances decreased to 6.76 percent (7.25 percent). However, net NPA rose to 2.18 percent (1.92 percent) during the quarter under review. Total provisions for the quarter decreased by almost six per cent at Rs.602 crore (Rs.642 crore).

The net interest margin stood at 7.3 percent. The bank had earlier given NIM guidance of around 7-7.5 percent in FY24.

He said that the bank plans to launch credit cards under the bank’s brand by the end of this fiscal year.

The bank’s share closed at INR 221.75, up by 2.71 percent, on the Bahrain Bourse on Friday.