Bandhan Bank Q4 profit falls 80% to Rs 103.03 crore on higher provisions

Net Interest Margin (NIM) stood at 6.8%, down 129 bps from 8.1% for the last quarter of FY20. The bank said NIM in Q4FY21 was at 8.8%, excluding one time interest reversal on NPA and interest on interest.

Private sector lender Bandhan Bank on Saturday reported an 80% year-on-year fall in net profit for the quarter ending March, to Rs 103.03 crore on the back of additional provisions on non-performing assets (NPAs).

The Kolkata-based bank had posted Rs 517.28 crore net profit in the fourth quarter of FY2019-20. The lender’s total provision and contingencies during the fourth quarter of FY2020-21 rose 92.7% y-o-y to Rs 1594.30 crore from Rs 827.36 crore in the same quarter previous fiscal.

During the period under review, gross NPAs as a percentage of total loans increased 569 basis points quarter-on-quarter to 6.8% from 1.11% during the third quarter last fiscal.

The bank’s proforma GNPA had stood at 7.12% in Q3FY21. During Q4FY21, net NPA ratio rose by 325 bps q-o-q at 3.51%. Chandra Shekhar Ghosh, MD and CEO, Bandhan Bank, said a very challenging year ended on a positive note with growth and collection coming back to normalcy. “With accelerated provisioning and write off, we are now well placed as we enter FY22. We remain cautious but confident as we deal with the Covid 19 second wave,” Ghosh said.

During the fourth quarter, the bank wrote-off Rs 1930 crore worth of loans, where Rs 1876 crore was from the microfinance segment. “Our bank did not restructure any loan in the microfinance segment, while Rs 617 crore of housing finance was restructured,” Ghosh said.

In microfinance segment, the lender’s collection efficiency, including NPA and written-off borrowers, at the end of March 31, 2021, stood at 95% as against 92% at the end of December 31, 2020. At end of the last quarter of FY21, collection efficiency, excluding NPA and written-off borrowers, was 98% as per value. Net Interest Income (NII) for the quarter grew 4.58% to Rs 1757.01 crore as against Rs 1,680.04 crore in the corresponding quarter of the previous year.

Net Interest Margin (NIM) stood at 6.8%, down 129 bps from 8.1% for the last quarter of FY20. The bank said NIM in Q4FY21 was at 8.8%, excluding one time interest reversal on NPA and interest on interest.

During the last fiscal, total advances grew 21.2% to Rs 87,042.9 crore as against Rs 71,846 crore as on March 31, 2020.

“Our customers got experiences from the first wave of Covid. Now, they know how to deal with the pandemic situation and lockdowns. Compared to the nationwide lockdowns last year, this time we are having state-wise and region-wise lockdowns to combat Covid second wave. So, we expect this time customers’ businesses would not be impacted that much as compared to the last year,” Ghosh said, adding thus, for the bank, FY22 would be better compared to FY21.