Bandhan Bank July-September Profit Slumps 88% on Higher Provisions, Weak Income Growth

Bandhan Bank Ltd. reported a steep 88% on-year drop in net profit to ₹1.12 billion for the September quarter, marking its second consecutive profit decline and the sharpest fall in six quarters. The fall was driven by sluggish business growth and a sharp rise in provisions.

Provisions nearly doubled, rising 90% on year to ₹11.53 billion. The bank’s interest income slipped 2.7% to ₹53.54 billion, its biggest decline since listing in 2018, while total income fell 3.4% to ₹59.00 billion. Total expenses climbed 7.9% to ₹45.90 billion, mainly due to higher operating and interest costs, with interest expenses up 7.8% at ₹27.65 billion.

Net interest income declined 12% on year to ₹25.89 billion, as the net interest margin contracted 152 basis points to 5.8%.
On the balance sheet front, advances grew 7.2% on year to ₹1.40 trillion, while deposits rose 11% to ₹1.58 trillion. The current and savings account ratio slipped to 28%, down 521 basis points from a year earlier.

The asset quality weakened, with the gross non-performing asset ratio rising to 5.02% from 4.68% a year ago. The net NPA ratio inched up to 1.37%. Fresh slippages increased to ₹15.9 billion, while recoveries and upgrades stood at ₹3.2 billion.

Credit cost was 3.4%, slightly lower than 3.5% in the previous quarter, but higher than 1.9% a year earlier.

The capital adequacy ratio improved to 18.23% from 14.34% a year ago, and the provision coverage ratio rose to 73.7%. For April–September, net profit declined 76% on year to ₹4.84 billion, while total income was largely unchanged at ₹121.02 billion.