Bandhan Bank Q1 profit jumps 35% as provisions decline sharply

Bandhan Bank on Tuesday reported a 35% year-on-year rise in net profit for the first quarter, riding on sharply lower provisions while operating profit stood 19% lower on account of higher operating expenses.

The net profit stood at Rs 502 crore as compared with Rs 372 crore in the year ago period, on 41% lower provisions at Rs 683 crore against Rs 1147 crore earlier.

Operating profit for the quarter stood at Rs 1358 crore against Rs 1668 crore, as total expenditure jumped about 8% at Rs 4876 crore. Total income, meanwhile, rose a mere 0.5% at Rs 6234 crore.


"Higher staff expenses on account of the new labour cost and a 65% rise in tech cost following the West Asia crisis led to the surge in expenditure," managing director Partha Pratim Sengupta said. "The lower credit cost helped the bank book higher net profit," he said.

The bank's gross non-performing assets ratio stood at 3.15% at the end June against 4.96% a year prior.

Meanwhile, a 90% year-on-year decline in treasury earnings at Rs 24 crore kept the total income under leash, chief financial officer Rajeev Mantri said.

The bank's gross advances grew 16% year-on-year to Rs 1.56 lakh crore. The retail loan book (other than housing) grew 45%, wholesale banking grew 38%, while the micro loan portfolio contracted a tad.

On the liability side, deposits rose at 7% annual rate as the bank shed bulk deposits by Rs 7000 crore. The bank has small overseas deposits while it mobilised Rs 30 crore through the special foreign-currency deposit mobilisation scheme.

"We are looking at borrowings from financial institutions, and the securitisation route to bridge the gap in credit and deposit growth," the MD said.