Finance2 min read

Bandhan Bank Q2 profit jumps 5.6 times as asset quality improves

By · Published by Everything Blog

In short

The significant financial improvement was heavily aided by a sharp drop in provisions and contingencies, alongside robust core income growth. Gross non-performing assets saw a marked reduction compared to the previous year, reflecting enhanced risk management across the lender's operations. Furthermore, total deposits and gross advances both posted steady year-on-year growth during the September quarter, signaling solid underlying demand.

Key points

  • The impressive earnings surge was primarily driven by improving asset quality and a notic…: The impressive earnings surge was primarily driven by improving asset quality and a noticeable recovery in the unsecured loan market.
  • Pre-provision operating profit rose by 19 percent to reach Rs 1,556 crore alongside an im…: Pre-provision operating profit rose by 19 percent to reach Rs 1,556 crore alongside an improved net interest margin of 6.1 percent.
  • Total deposits expanded by 9 percent year-on-year to reach Rs 1.73 lakh crore by the end…: Total deposits expanded by 9 percent year-on-year to reach Rs 1.73 lakh crore by the end of the second quarter.

Sources checked by our analysis pipeline: 1

The Kolkata-headquartered private sector lender managed to reduce gross non-performing assets ratio to 3.11% at the end of September from 5.02% a year prior in tandem with the recovery in the unsecured loan market, which contributed about a third to its total portfolio.

"I would like to highlight that this is the best profit number in the last eight quarters, instead of the 5.6 times rise, which is a reflection of steady growth helped by a shift towards a more secular and diversified advance portfolio," managing director Partha Pratim Sengupta said after announcing the quarterly earnings.

The bank's pre-provision operating profit for the quarter stood 19% higher at Rs 1,556 crore over Rs 1,310 crore in the year-ago period. The provisions (other than tax) and contingencies charged to the profit and loss account for the quarter were at

Rs 718 crore compared with Rs 1,153 crore earlier.

Its net interest margin for the second quarter improved to 6.1% from 5.8% in the same period last year. Net interest income grew 14% at Rs 2,960 crore while total income rose 9.5% at Rs 3,458 crore.

The bank's gross advances stood at Rs 1.58 lakh crore at the end of September, growing 13% year-on-year while deposits rose 9% to Rs Rs 1.73 lakh crore.

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Original source: economictimes.indiatimes.com

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